4431 

05 


UC-NRLF 

III!  mill  nil!  I, 


B   M   S77   07M 


"^ 
c\i 

CO 
CM 

O 
>- 


OCT  26  '"" 


REPORT  ON 


government  Ownership 


OF 

Public  Utility  Service 
Undertakings 

Prepared  by  the 
COMMITTEE  ON  MUNICIPAL  OWNERSHIP 

of  the 
CITY  CLUB  OF  LOS  ANGELES 

PRESENTED  TO  THE  CLUB,  AND  ORDERED  PRINTED 
June  Thirty,  Nineteen  Seventeen 

■"••^•*" 

PRICE  10  CENTS 

PUBLISHED  BY  THE 

CITY  CLUB  OF  LOS  ANGELES,  CALIFORNIA 

September  15,  1917 


INTRODUCTION 

During  the  latter  part  of  1915  a  Special  Committee  on 
Municipal  Ownership  was  appointed  by  Francis  B.  Kellogg, 
President  of  the  City  Club  of  Los  Angeles,  with  Charles  K. 
Mohler,  Consulting  Engineer,  Chairman. 

The  first  result  of  the  Committee's  work  was  embodied 
in  a  report  (based  on  1915  data  then  available)  presented 
during  the  fall  of  1916,  and  given  to  the  press.  This  part  of 
the  report  is  still  left  mainly  on  the  1915  basis. 

A  supplemental  report  was  subsequently  prepared,  a  brief 
synopsis  of  which  was  presented  to  the  Club  at  its  regular 
meeting  on  Saturday,  June  30th,  1917,  by  the  Committee 
Chairman. 

Both  reports  have  been  almost  wholly  the  work  of  Mr. 
Mohler. 

These  reports  contain  a  vast  amount  of  detail  information 
which  should  be  made  available  to  those  interested  in  public 
service  finances  and  municipal  ownership  questions.  It  is 
believed  that  much  of  the  data  in  the  supplemental  report 
and  the  method  of  presentation  are  original  and  unique. 

In  view  of  the  great  importance  of  Municipal  Ownership 
extension  and  the  interest  of  the  general  public  therein,  the 
City  Club  has  seen  fit  to  have  both  detailed  reports  and  the 
synopsis  published.  It  is  earnestly  hoped  that  in  so  doing 
the  Club  and  its  Committee  will  have  furnished  a  distinct 
contribution  to  aid  in  the  full  realization  of  government  own- 
ership of  all  Public  Utility  Service  Undertakings. 

Respectfully, 

A.  G.   BARTLETT, 
President,  City  Club  of  Los  Angeles. 


Los  Angeles,  Calif.,  July  28th,  1917. 


(u^^ir 


REPORT  ON  GOVERNMENT  OWNERSHIP  OF  PUBLIC 

UTILITY  SERVICE  UNDERTAKINGS  BY  THE  LOS 

ANGELES  CITY  CLUB  COMMITTEE  ON 

MUNICIPAL    OWNERSHIP 


-^^ 


INTRODUCTORY  OUTLINE  OF  ''FIRST"  A2n[D  "SUP- 
PLEMENTAL" REPORTS       '.••■' 

There  is  probably  more  expressed  sentiment  in  favor  of  municipal  ownership 
of  public  service  utilities,  with  at  the  same  time  less  real  accomplishment  in 
establishing,  than  for  any  other  question  of  public  policy  in  our  country. 

As  many  complaints  are  heard  about  the  high  cost  of  living,  taxes,  ineffi- 
ciency and  graft  in  public  service,  and  others  of  a  like  nature,  it  should  be  of 
interest  to  every  one  to  know;  of  the  accomplishments  of  cities  in  other  coun- 
tries, the  financial  status  and  attainments  of  Los  Angeles  in  municipal  ownership, 
also  the  actual  and  relative  value  of  property  devoted  to  public  utility  service, 
and  the  annual  cost  of  service  rendered  by  government  agencies  and  privately 
owned  utility  concerns. 

To  better  inform  ourselves  the  committee  has  undertaken  to  secure  and  pre- 
sent data  on  the  following  questions: 

First — The  extent  of  governmental  ownership  of  public  service  utilities  in 
Great  Britain,  Germany  and  the  United  States. 

Second — Bonded  debt  for  revenue  and  non-revenue  producing  purposes  in 
some  typical  German  and  American  cities,  and  the  City  of  Los  Angeles. 

Third — Accomplishments  of  Los  Angeles  in  undertaking  municipal  ownership. 

Fourth — Extension   of   government   ownership. 

Fifth — The  value  of  property  devoted  to  public  utility  service  in  the  city 
under:  (a)  Public  ownership,  (b)  Private  ownership,  (c)  Public  property 
created  under  private  contracts,  (d)  The  total  amount  of  public  service  prop- 
erty subject  to  private  control  or  influence. 

Sixth — The  annual  cost  of  public  service  for  the  city  under:  (a)  Public 
ownership  and  operation,  (b)  Private  ownership  and  operation,  also,  (c)  Cost 
of  public  work  done  under  private  contract. 

Seventh— Incentives  for  political  activity  by  the  private  interests  engaged 
in  public  utility  service  and  public  works  contracts. 

Eighth — Conclusions  and  recommendations  for  extension  of  government  own- 
ership of  public  service  utility  undertakings. 

[3] 


49365fi 


SYNOPSIS  OF  REPORTS 

COMPARISON    OF    AMERICAN,    GREAT    BRITAIN    AND    GERMAN    CITIES 

In  the  56  largest  American  cities,  the  50  largest  cities  in  Great  Britain  and 
a  like  number  in  Germany,  the  public  ownership  of  Water,  Gas  and  Electric 
supplies  in  number  and  per  cents  are  as  follows: 

OWNERSHIP  OF  THREE  LEADING  SERVICE  UTILITIES 

No.  of  — Water —         — Gas—  — Electric—  — Total- 
Country-                 Cities.  No.       P.C.  No.       P.C.  No.       P.C.  No.        P.C. 

Great  Britain    50  39         78.  21         42.  44         88.  104         69.3 

Germany     50  48         96.  50       100.  42         84.  140         93.3 

United  States   56  49         87.5           1           1.8  7         12.5         57         33.9 

Totals*  and  % 156       136         87.2         72         46.1         93         59.6       301         64.3 

♦Total  n amber  of  utilities  for  all  cities  468. 

OAiiership  of  water  service  by  American  cities  is  well  established,  as  49 
of  the  56  "AHfiS,  or '87.5%,  now  own  their  supplies.  This  is  1/^%  higher  than  the 
combined  average  for  the  100  cities  in  Great  Britain  and  Germany. 

All  of  the  50  German  cities  own  their  gas  supply  while  only  one  of  the  56 
American  cities  owns  its  supply. 

Ownership  of  electric  service  shows  that  Great  Britain  cities  own  88%, 
German  cities  84%,  while  the  56  American  cities  stand  at  12.5%. 

The  total  average  ownership  of  these  three  utilities  show  that  the  Great 
Britain  cities  own  more  than  double  the  per  cent  of  American  cities,  while 
the  German  city  ownership  per  cent  is  nearly  three  times  as  much  as  ours. 

In  contrast  to  the  well  established  policy  of  ownership  of  water  service, 
municipal  ownership  of  gas  supplies  is  hardly  considered  as  yet,  and  little  more 
than  a  beginning  has  been  made  in  electric  service  ownership  in  American  cities. 

LOS  ANGELES'  EXPERIENCE  WITH  MUNICIPAL  OWNERSHIP 

Since  owning  its  water  supply  Los  Angeles  has  reduced  the  water  rates 
from  20  to  7  cents  per  100  cu.  ft.  and  the  minimum  monthly  bill  from  $1.50  to 
50  cents. 

Unreasonably  high  rates  are  charged  for  natural  gas  supplied  in  the  city 
and  a  controversy  has  been  carried  on  concerning  the  matter  for  the  last  four 
years. 

The  development  of  the  electric  power  along  the  aqueduct  by  tlie  city  lias 
been  held  up  and  delayed  from  time  to  time  through  the  influence  and  opposi- 
tion of  the  privately  owned  utility  interests.  The  total  electrical  development 
along  the  aqueduct  will  amount  to  126.820  K.  W.  This  is  equivalent  to  44.17% 
of  the  combined  production  of  the  privates  concerns  now  serving  Los  Angeles 
and  vicinity  (287,100  K.  W.).  It  is  equivalent  to  30.6%  of  the  total  full  produc- 
tion of  the  aqueduct  and  the  private  concerns  combined  (315.225  K.  W.).  Since 
the  detailed  report  was  prepared  the  city  has  put  in  operation  one  plant  with 
28,126   K.  W.   capacity. 

While  the  Los  Angeles  bonded  debt  per  capita  is  hlRher  than  in  most  cities 
of  the  country,  the  Issues  are  principally  for  revenuei  producing  undertakings, 
which  have  not  been  brought  fully  up  to  a  revenue  producing  bnHis.  The  service 
utilities  that  should  be  taken  over  at  once  by  tlio  city,  Gas  and  Klectriclty,  are 
going  concerns  and  should  be  fully  self  Kupporting.  with  a  probable  good  profit 
return  at  the  present  rates.  For  a  community  to  issue  bonds  for  such  undertak- 
ings, in  whatever  amount  necessary,  on  a  conservative  busint'ss  basis,  la  only 
good  common  sense  when  a  distinct  gain  or  saving  to  the  community  can  be 
secured  by  so  doing. 

[4] 


PUBLIC    SERVICE— PROPERTY    VALUES 

Detailed  information  in  tabular  form  gives:  Non-Revenue  Producing  Mu- 
nicipal and  County  Property.  Revenue  Producing  Municipal  Property.  Privately 
Owned  Public  Service  Utility  Property,  Local  and  Interstate. 

The  summary  shows  the  total  per  capita  value  of  service  property  is  $935.85, 
of  which  over  half  ($491.78)  is  under  private  ownership.  Public  property  created 
under  private  contract  amounts  to  a  total  of  $44,000,000  or  $88.00  per  capita. 
Public  property  subject  to  private  influence  through  franchise  grants  $138,266,605 
or  $276.53  per  capita.  Total  public  service  property  subject  to  private  interest 
influence  $428,155,000  or  $856.31  per  capita  equal  91.54%  of  the  total.  State 
and  United  States  property  is  not  included. 

COST  OF  SERVICE,  DIRECT  TAX  LEVY,  ETC. 

Detailed  information  on  the  annual  cost  of  public  service  covers  cost  of: 
Non-Revenue  Producing  City  and  County  Service.  Revenue  Producing  Service 
by  the  City.  Public  Utility  Service  Rendered  by  Private  Concerns,  Local  and 
Interstate. 

Information  is  given  concerning  the  annual  cost  of  work  carried  out  under 
private  contract,  which  in  1915  amounted  to  $6,707,629  or  $13.41  per  capita. 

The  summary  gives  the  following  annual  costs  of  public  service  rendered  by: 

Publicly    Owned — 

City  and  School  District.  .$16,711,127.  Total,  Per  Capita  $33.42 

County    6,282,000.  Total,  Per  Capita    12.56  (City's  Portion) 

State    3,160,000.  Total,  Per  Capita       6.32  (City's  Portion) 

United   States    5,470,000.  Total,  Per  Capita     10.94  (City's  Portion) 

First   Sub-Total    $31,623,127.     Total,  Per  Capita  $63.24 

Privately  Owned  Utility — 

Local     $25,078,782.     Total,  Per  Capita  $50.16 

Interstate    19,030,540.     Total,  Per  Capita    38.06     (City's  Portion) 

Second    Sub-Total $44,109,322.     Total,  Per  Capita  $88.22 

Grand    Total    $75,732,449.  Per  Capita  $151.46 

Cost  of  water  transportation,  cartage,  storage,  etc.,  is  not  included. 
The  cost  of  public  service  is  paid  by  direct  tax,  fees,  licenses,  rentals,  in- 
ternal revenue,  duties,  rates  and  fares. 


Direct  tax  levy  for  1916  collected  by: 


City   $  6,753,715. 

County    4,410,000. 


Total,  Per  Capita  $13.51 
Total,  Per  Capita      8.82 


Total  Sum 


.$11,163,715. 


Per  Capita  $22.33 


(City's  Portion) 
(General  Property  Tax) 


f5] 


INCENTIVES  FOR  POLITICAL  ACTIVITY  BY  PUB- 
LIC UTILITY  SERVICE  AND  CONTRACTING  CON- 
CERNS AND  NEED  FOR  EXTENSION  OF  PUB- 
LIC  OWNERSHIP   AND    CONDUCT    OF 
PUBLIC  SERVICE  UNDERTAKINGS 

Incentives  for  Political  Activity 

Municipal  government  in  the  United  States  has  been  either  disappointing  or 
a  failure  largely  because  of:  First — Poor  form  of  government.  Second — City 
elections  based  on  national  party  politics.  Third — The  influence  of  the  spoils 
system.  Fourth — Growth  of  public  service  utility  undertakings  in  private  hands 
and  franchise  granting.  Fifth — Letting  public  works  contracts  to  private  in- 
terests. Sixth — Lack  of  interest  by  the  electors  in  public  affairs.  In  short, 
our  cities  have  been  governed  in  the  interest  of  private  gain  rather  than  for 
the   unselfish   good   of  all. 

Back  of  municipal  government,  graft  and  scandal  has  been  almost  invariably 
franchise  trading  and  public  works  contracts.  Examples:  Tammany  Hall  con- 
tractors in  New  York  City,  and  the  San  Francisco  franchise  grafters. 

MONEY   MEASURE   OF   CONTROL   INFLUENCE 

Public  service  property  values  and  cost  of  service,  under  private  control, 
should  serve  to  show  the  degree  of  "interest"  of  the  "Invisible  Government" 
or  "System"  in  public  affairs.  Over  half  (52.6'7f)  of  the  property  devoted  to 
public  service  is  privately  owned,  while  over  a  third  more  (38.949'c)  is  subject  to 
private  interest  influence,  making  a  total  of  over  nine-tenths  (91.54%)  under 
selfish  interest  pressure.  Out  of  the  $151.46  per  capita  annual  serivce  cost,  $88.22 
or  nearly  three-fifths  (58.25%)  is  furnished  by  privately  owned  concerns.  Private 
enterprise  is  undertaken  primarily  for  profit. 

Private  interests  concerned  in  municipal  affairs  can  be  served  by  a  "friendly" 
administration,  hence  their  interests  and  activity  in  politics.  Prizes  and  re- 
turns to  be  secured  are  so  great  that  few  of  our  cities  have  escaped  this  blight- 
ing influence. 

Gain  from   Government   Ownership  in  Dollars  and   Cents 

Disregarding  corruption,  graft  and  political  scandal,  what  should  complete 
government  ownership  of  public  service  utilities  and  enterprises  mean  to  us  In 
money  saving? 

Public  service  property  privately  owned  amounts  to  almost  $500  ($491.78) 
per  capita.  Rate  fixing  "fair  return"  is  8%.  Municipal  bond  Interest  Is  generally 
4%%.  Annual  saving  between  fair  return  and  municipal  bond  interest  on  under- 
takings conducted  without  profit  amounts  to  3Vj';;.  This  amount  of  saving^  on 
the  per  capita  private  ownership  property  value  of  $491.78,  amounts  to  $17.21 
per  capita  or  $8,605,000   for  the   city. 

The  per  capita  amount  of  contract  work  in  1915  was  thirteen  and  one-half 
dollars  ($13.41).  Contractors'  profits  are  generally  figured  at  20%.  Saving  If 
done  by  city  without  profit,  $2.6K  per  capita,  making  witli  tlie  above  about  twenty 
dollars   ($19.S!t)   or  nearly  ten   million  dollars    ($9.'.Ur..(iO(i)    for  the  city. 

With  complete  government  owner.sliip  of  all  service  utilities  a  vast  amount  of 
duplication  and  waste  could  ba  avoided.  With  parcels  post  win-  have  a  half 
dozen  private  exi)res8  companies?  Why  should  not  the  telegraph  and  telephone 
service  be  consolidated  and  made  a  part  of  the  jiostal  system?  It  is  hardly 
necessary  to  enumerate  the  duplication  of  utility  service  concerns  in  Los  Angeles. 
The  annual  cost  of  utility  service  in  the  city  rendered  by  privately  owned  con- 

[6] 


cerns  in  1915  was  $44,109,322  or  $88.22  per  capita.  It  is  a  conservative  pre- 
sumption that  the  elimination  of  duplication  alone  vi^ould  save  10%  on  this 
amount  or  $4,410,932;  per  capita,  $8.82.  This  with  "fair  return"  saving  gives 
a  total  of  $13,015,932  or  $26.03  per  capita.  Throw  in  for  good  measure  the  saving 
on  contracts.  The  direct  tax  levy,  both  city  and  county,  amounts  to  $11,163,715,  or 
a  per  capita  of  $22.33.  Often  complaints  are  made  about  the  amount  of  the 
direct  tax  levy.  The  two  items  of  saving  on  cost  of  service  rendered  by  private 
utility  concerns,  alone  amount  to  over  16.5%  more  than  the  entire  direct  tax 
levy,  saving  $26.03;  tax  levy  $22.33  per  capita. 

The  six  largest  per  capita  items  of  expense  for  service  are:  Interstate 
transportation,  $35.00;  local  street  railway  transportation,  $16.20;  local  tele- 
phone, $13.04;  electric,  $12.52;  education,  $9.65;  gas<  $8.21.  Five  of  the  above 
are  privately  owned  utilities  and  amount^  to  $84.97  out  of  a  total  of  $94.62  or  90 7o 
of  this  service. 

WHAT   THE   POTENTIAL   SAVING  WOULD   BUY 

If  the  people  of  Los  Angeles  were  able  to  save  the  amount  of  the  two  Items 
above,  $13,015,932  per  annum,  some  of  the  following  results  might  be  accomplished: 

One  year's  saving  would  nearly  pay  for  the  estimated  value  of  the  Los  An- 
geles Gas  and  Electric  Corporation  property,  $14,000,000.  The  same  estimate 
applies  to  the  two  telephone  companies.  It  would  more  than  two-thirds  pay 
for  the  estimated  value  of  the  Southern  California  Edison  property. 

Two  years'  savings  ($26,031,864)  would  more  than  cover  the  estimated  value 
or  bonded  debt  of  the  Los  Angeles  Railway  Corporation  ($23,500,000).  It  falls 
only  $2,967,136  short  of  the  estimated  value  of  the  property  of  the  Pacific  Light 
and  Power  Corporation. 

Eleven  years'  savings  ($143,175,252)  would  more  than  pay  for  the  entire 
estimated  value  of  all  local  utility  service  property  now  under  private  owner- 
ship $140,427,000). 

We  believe  these  estimates  of  saving  are  conservative.  In  view  of  the 
above  showing  we  also  believe  that  all  utility  service  that  now  depends  on  fran- 
chise grants  or  is  in  its  nature  a  monopoly  should  be  carried  on  as  government 
undertakings.  As  practically  all  service  now  carried  on  as  government  under- 
takings were  at  one  time  private  enterprises,  why  should  we  be  slow  or  timid 
about  complete  ownership  by  the  government? 


[7] 


REPORT  ON  THE  EXTENSION  OF  PUBLIC  OWNER- 
SHIP OF  PUBLIC  SERVICE  UTILITIES 

GROWTH  OF  PUBLIC  OWNERSHIP 

In  general  all  functions  of  government  such  as  tax  collecting,  the  conduct 
of  schools,  poliding  and  fire  protection,  construction  and  maintenance  of  high- 
ways, postal  service,  sewerage  disposal,  sanitation,  public  health,  etc.,  were  car- 
ried on  at  first  as  private  enterprises.  It  logically  follows  that  government 
or  municipal  ownership  will  eventually  include  all  such  public  service  utilities 
as  water,  gas,  electricity,  telegraph,  telephone,  transportation,  marketing,  many 
features  of  recreation,  amusement  and  other  like  enterprises. 

As  most  of  the  functions  and  utility  services  now  universally  performed  by 
the  governing  agencies  are  not  of  a  profitable  nature,  little  opposition  was  en- 
countered in  taking  them  over.  On  the  other  hand  most  of  those  still  conducted 
by  private  enterprise  are  of  a  profitable  nature,  and  as  a  result  the  effort  to 
extend  public  ownership  to  include  them,  meets  the  most  strenuous  opposition 
and  innumerable  obstacles  are  thrown!  in  the  way  by  those  owning  or  having 
interests  in  them. 

PUBLIC  OWNERSHIP  IN  GREAT  BRITAIN,  GERMANY 
AND  THE  UNITED  STATES 

European  countries  have  gone  much  farther  in  public  ownership  of  service 
utilities  than  has  the  United  States.  Great  Britain  and  Germany  have  made 
greater  advancement  than  any  other  countries.  There,  railroad  transportation 
and  the  telegraph  and  telephone  are  carried  on  in  part  at  least  as  government 
enterprises.  In  the  larger  cities  the  majority,  and  in  some  cases  all  of  the 
important  utility  enterprises  are  carried  on  under  municipal  ownership.  Fred- 
rick C.  Howe,  in  his  "European  Cities  at  Work,"  gives  for  the  fifty  principal 
cities  of  Great  Britain  In  1909  and  a  like  number  for  Germany  in  1908,  the  fol- 
lowing number  of  utilities  municipally  owned: 

TABLE  NO.  1 

MUNICIPAL.   OWNERSHIP   OF   UTILITIES   IN    THE    50    LEADING    CITIES    OP 
GREAT  BRITAIN  AND  A  LIKE  NUMBER  IN  GERMANY 

Number  Municipally  Owned  in  Total 

Great  Britain             Germany  Units 

Kind  of   Utility   or  Enterprise —                No.      Per  Cent.  No.    Per  Cent.  Each. 

Water  Supply   39             78.0  48             96.0  50 

Electric   44             88.0  42             84.0  60 

Gas 21             42.0  50           100.0  50 

Tramways      42             84.0  23             46.0  50 

Baths    49             98.0  48             96.0  50 

Markets    44             88.0  50           100.0  50 

Slaughter  Houses   23            46.0  43            86.0  50 

Total  and  per  cent  total  of  350* 262  74.86         304  86.86         350 

*"Total  Unit  of  350"  represents   the  possible  number  of   utilities   embraced 
under  the  heads  given.     For  the  two  countries  combined,  the  100  cities  show  566 
out  of  a  total  of  700,  or  80.85%  of  the  utilities  under  public  ownership. 
Totals  and  per  cents  computed  and  added  by  C.  K.  Mohler. 
(Thla   rt'poit    ba.sod   on    tliitii   iiviillnbU'    In    lUl'i.) 
[8] 


The  United  States  Census  Report  for  1912  gives  for  56  American  cities  of 
100,000  population  or  over,  the  following  number  of  utilities  under  public 
ownership : 

TABLE  NO.  2 

MUNICIPAL  OWNERSHIP  OF  UTILITIES  IN  56  LEADING  AMERICAN  CITIES 

No.  of  Utilities 
Kind  of  Utility  or  Total  Units        Publicly  Owned 

Enterprise —  Possible.        No.        Per  Cent.  Remarks. 

Water   Supply    56  49  87.5 

Gas  Supply  56  1  1.8  Richmond,  Va. 

Electric  Supply    56  7  12.5 

Total  and  %    of  total  of  168 168  57  33.93 

Of  139  additional  American  cities  with  a  population  of  over  thirty  thousand 
and  under  one  hundred  thousand,  the  same  source  of  information  gives  their  pub- 
lic ownership  of  utilities  as  follows: 

TABLE  NO.  3 

MUNICIPAL  OWNERSHIP  AND  OPERATION  OF  UTILITIES  IN  139  AMERICAN 
CITIES  WITH  A  POPULATION  OF  OVER  30,000  AND  UNDER  100,000 

Number  of  Utilities 
Total  Units  Publicly  Owned. 

Kind  of  Utility  or  Enterprise —  Possible.  No.  Per  Cent. 

Water  Supply  139  101  72.66 

Gas  Supply  139  4  2.88 

Electric  Supply  139  12  8.63 

Total  and  %  of  total  of  417 417  117  28.06 


TABLE  NO.  4 

COMPARISON   OF   MUNICIPAL   OWNERSHIP   IN   FIFTY    OF   THE    LARGEST 

CITIES  OF  GREAT  BRITAIN  AND  GERMANY  AND  FIFTY- SIX 

IN    THE    UNITED    STATES 

— Ownership  of  Three  Leading  Utilities —     Inclu- 
No.  of      Water  Gas  Electric  Total       sive 

Country—  Cities.  No.     P.C.     No.       P.O.     No.     P.O.     No.     P.C.  Total. 

Great  Britain*    50       39       78.0       21       42.0       44       88.0     104       69.3       150 

Germany    50       48       96.0       50     100.0       42       84.0     140       93.3       150 

United  Statest    56       49       87.5         1         1.8         7       12.5       57       33.9       168 

Total  and  %  of  468..  156     136       87.2       72       46.1       93       59.6     301       64.3       468 

*The  small  percentage  of  gas  plants  owned  in  Great  Britain  is  on  account  of 
the  early  grants  having  been  given  in  perpetuity,  and  now  results  in  much  difficulty 
and  expense  in  a  municipality  taking  over  the  utility. 

tThe  showing  for  ownership  of  electrical  plants  in  the  United  States  is  to 
a  degree  misleading,  as  a  number  of  cities  counted  as  having  municipal  ownership 
are  in  fact  supplied  almost  wholly  by  private  companies. 

Examples— Los  Angeles,  Cleveland,  Chicago,  etc.  Others  are  supplied  in  part 
from  private  plants,  such  as  Pasadena. 

Some  of  the  American  cities  listed  as  having  municipal  water  supplies  are 
also  supplied  in  part  from  privately  owned  plants,  among  which  are  Los  Angeles, 
San  Francisco,  Pittsburg,  New  York,  etc. 

Of  the  195  American  cities  above  considered  only  two  (Holyoke,  Mass.,  and 
Hamilton,  Ohio)   own  all  three  supplies,  water,  gas  and  electricity.     Of   the   19 

[9] 


owning   their   electric   plants,    all   own    their    water    supply    except   one    (Joplin, 
Missouri). 

After  considering  the  relative  number  of  utilities  owned  by  European  and 
American  cities,  it  will  be  interesting  to  compare  the  bonded  indebtedness  for  pro- 
ductive and  non-productive  undertakings,  incurred  by  seven  German  and  a  like 
number  of  American  cities  of  about  the  same  relative  size.  To  again  quote  from 
Howe's  "European  Cities  at  Work,"  after  making  computations  to  obtain  the  per 
capita  indebtedness  in  each  city  and  the  totals  of  population  and  debt  and  per 
cents  of  total  debts,  we  get  the  following  tabulation  (see  table  No.  5) : 

For  general  information  and  comparison  the  bonded  indebtedness  of  Los  An- 
geles was  compiled  and  the  per  capita  amount  for  different  purposes  computed 
(see  table  No.  6) : 

TABLE  NO.  5 

BONDED  DEBT  FOR  REVENUE  AND  NON-REVENUE  PRODUCING  UNDER- 
TAKINGS IN  VARIOUS  CITIES  OF  THE  UNITED 
STATES  AND  GERMANY 


—Total  Debt- 

— Productive —    ■ 

— Non-Productive — 

Aggre- 

Per 

Aggre- 

Per 

Aggre- 

Per 

City- 

Population 

gate. 

Capita. 

gate. 

Capita. 

gate. 

Capita. 

German 

Cities 

Berlin  .... 

2,001,032 

$99,254,000 

$49.60 

$64,767,000 

$32.37 

$34,512,000 

$17.25 

Elberfeld.. 

168,000 

13,595,000 

80.92 

7,252,000 

43.16 

6,392,600 

38.05 

Solingen   .. 

50,961 

3,285,000 

64.46 

2,257,000 

44.29 

1,029,000 

20.19 

Halle   

176,798 

9,500,000 

53.73 

2,877,000 

16.27 

4.612,000 

26.08 

Magdeburg. 

247,358 

15,005,000 

60.66 

7,775,000 

31.43 

7.503,900 

30.34 

Remsheid  . 

69,700 

3,930,000 

56.38 

2,790,000 

40.03 

1.147,000 

16.46 

Dusseldorf 

284,439 

28,585,000 

100.50 

22,260,000 

78.26 

6,327,000 

22.24 

Totalt. 
Percentage 

2,998.288  $171,501,500 
of  total  debt 

$57.20 

$109,978,000 
64.12<7. 

$36.68 

$61,523,500 
35.887o 

$20.52 

Cities   of  the    United  States 

Philadelphia 

L  1,526,383 

$99,355,026 

$65.09 

$30,776,642 

$20.16 

$68,578,384 

$44.93 

Cleveland 

538,374 

37,304,908 

69.30 

5,613,684 

10.43 

31,691.224 

58.86 

Minneapolis 

.      294,330 

14,927,202 

50.72 

1,933,424 

6.57 

12.992.424 

44.14 

Indianapolis 

.      228,690 

4,790,401 

20.95 

22,000 

.96 

4,768.401 

20.85 

Denver    . . . 

207,112 

5,814,419 

28.07 

329,200 

15.89 

5.485.219 

26.48 

122,187 
s     110,060 

8  598  997 

70  38 

Graijd  Rapid 

3,148,612 

28.61 

1,137,500 

10.33 

2,047.112 

18.60 

Total. . 

.   3,037,136 

$165,376,568 

154.45 

$39,812,450 

$13.11 

$125,564,118 

$41.34 

Percents  of 

total  debt. 

.      24.07% 

75.93% 

Note — tTotal  of  column  three  does  not  agree  with  that  obtained  from  columns 
five  and  seven.     Percentages  are  computed  from  columns  five  and  seven  totals. 


TABLE  NO.  r)a 

DETAILS  OF  LOS  ANGELES  CITY  AND  (COUNTY  ROAD  BONDS) 


Los  Angele8§  500,000*  $50,682,038  $101.36 
L.  A.  Countyt  700,000*  2,428,570  4.86 
Electric    (unsold) 2,054,000       4.11 


$38,885,850 
2,054,000 


4.11 


$11,796,188 
2,428.570 


$23.59 
4.86 


Total. 


14.224.758       28.45 


$55,164,608  $110.33     $40,939,850     $81.88     $14,224,758     $28.45 

Total  less  unsold 

electrlct     53,110,608     106.22       3S,S8r...sr.O       77.' 

•Estimated  population. 

§Sce  table  number  six  for  detail  of  Los  Angelos  bonds. 

JThe  amount  of  County  bonds  shown  is  5/7  of  the  total  road  bond  Issue  of 
$3,400,000.  approximately  the  city's  proi)ortlon. 

tMarch  1,  1915.     Note:      Headings  of  Table  5  also  cover  5a. 

[10] 


TABLE  NO  6 

BONDED    INDEBTEDNESS    FOR    CITY    OF    LOS    ANGELES,    COMPRISED    OF 
CITY  ISSUES,  L.  A.   CITY  SCHOOL  DISTRICTS,  AND  CITY'S  PRO- 
PORTION OF  COUNTY  ROAD  BONDS,  ON  MARCH  1,  1916 

(Data  Furnished  by  City  and  County  Auditors,  March  28,  1916.) 

Bond  Debt 

Issued  for—  Aggregate.  Per  Capita. 

Non-Revenue   Producing 

City,  Miscellaneous    $  2,406,988  $  4.81 

L.  A.  City  School  District 9,389,200  18.78 

L.  A.  County  Road  Bonds* 2,428,570  4.86 


Total     $14,224,758  $28.45 

*5/7  of  $3,400,000,  City's  proportion. 

Revenue  Producing 

City  Water  and  Aqueduct $25,869,850  $51.74 

City  Electric  Plantf    7,946,000  15.89 

City  Harbor   5,070,000  10.14 


Total     $38,885,850  $77.77 

t$2,054,000  yet  to  be  sold. 

Add  Electric  to  be  sold  gives  total  Electric 10,000,000  20.00 


City  total    $40,939,850  $81.88 

Combined  Revenue  and  Non-Revenue  Producing 

L.  A.  City  School  District  $  9,389,200  $18.78 

L.  A.  County  Road  Bonds 2,428,570  4.86 

City  total  issue 43,346,938  86.69 


Total  of  all  issues $55,164,608  $110.33 

GENERAL  SUMMARY  OF  MUNICIPAL  OWNERSHIP 

IN   GREAT   BRITAIN,    GERMANY   AND 

THE   UNITED   STATES 

A  glance  at  Tables  Nos.  1,  2,  3  and  4  will  show  to  what  extent  British  and 
German  cities  have  surpassed  those  of  the  United  States  in  establishing  and  con- 
ducting municipal  undertakings. 

Regardless  of  criticism  and  attacks  directed  at  municipal  ownership  of 
utility  undertakings,  it  caa  be  only  a  matter  of  time  until  all  service  of  this 
nature  is  taken  over  by  the  governing  agencies.  The  results  obtained  in  the 
larger  cities  of  Great  Britain  and  Germany  have  been  so  generally  and  emi- 
nently satisfactory  that  a  return  to  private  ownership  is  never  advocaetd.  The 
ownership  of  water  supplies  in  American  cities  is  universally  accepted  as  cor- 
rect and  sound  in  principle  and  wholly  desirable.  Of  the  cities  having  over 
an  hundred  thousand  population  seven-eights  of  them  now  own  their  water  sup- 
plies, and  none  are  returning  to  private  ownership.  On  the  contrary,  some  cities 
are  spending  large  amounts  to  secure  or  extend  municipal  supplies.  San  Fran- 
cisco and  San  Diego  may  be  noted  in  this  particular. 

In  contrast  to  the  showing  for  water  supply  ownership,  note  the  fact  that 
all  or  100%  of  the  gas  supplies  in  the  fifty  largest  German  cities  are  publicly 
owned.  The  showing  for  the  largest  American  cities  is  only  one  out  of  fifty-six, 
or  1.8%. 

[11] 


In  many  respects  the  business  of  supplying  gas  is  not  materially  different 
from  that  of  supplying  water.  This  is  especially  true  of  natural  gas.  It  is  hard 
to  understand  why  no  more  has  been  done  by  American  cities  in  taking  over  or 
establishing  their  own  gas  supplies.  Possibly  it  is  for  the  lack  of  a  few  good 
examples  to  begin  with  and  the  development  of  popular  policy  along  that  line. 
For  good  examples  in  this,  as  well  as  in  many  other  things  we  may  look  to 
European  cities. 

Again  referring  to  Table  No.  1,  we  see  to  what  extent  European  cities  have 
made  progress  in  the  ownership  of  their  water,  gas  and  electric  supplies,  street 
railways,  baths,  markets  and  slaughter  houses.  American  cities  show  advance 
progress  for  their  ownership  of  water  supply  only. 

Philadelphia  owned  its  own  gas  works  and  operated  them  up  to  about  fifteen 
years  ago,  when  they  were  leased  to  private  parties  by  the  notorious  gangsters 
of  that  municipality. 

MUNICIPAL  0\VNERSHIP  IN  LOS  ANGELES 

In  1901,  bonds  were  voted  by  the  city  in  the  amount  of  $2,000,000  for  taking 
over  the  Los  Angeles  City  Water  Company  property.  In  1904,  $337,000  bonds 
were  voted  and  the  West  Side  Water  Company  and  the  West  Los  Angeles  Water 
Company  properties  were  taken  over  by  the  city.  In  the  same  year,  $150,000  of 
bonds  were  also  issued  for  constructing  Silver  Lake  Reservoir. 

How  many  private  water  companies  were  still  in  existence  at  that  time  is 
not  definitely  known.  In  1910,  and  up  to  1914,  there  were  still  eighteen  private 
companies  giving  service.  The  city  has  been  buying  up  these  private  companies, 
from  time  to  time,  until  there  are  now  ten  furnishing  service  inside  the  city  limits. 
Most  of  these  concerns  were  and  are  small  with  few  customers.  Their  rates  were  and 
are  invariably  high  and  in  some  cases  the  service  extremely  bad  and  the  quality 
of  water  poor.  Their  origin  was  generally  inspired  through  real  estate  specula- 
tion. 

Water    Service 

The  rates  for  water  at  the  time  the  first  plant  was  taken  over  by  the  city 
were  nearly  three  times  what  they  have  been  most  of  the  time  since.  The  old 
rates  and  reductions  were  as  follows   (shown  in  Table  No.  6a.) : 

TABLE  NO.  6a 

WATER  RATES,  LOS  ANGELES  MUNICIPAL  PLANT  1902—1916 

Rates  and  Amounts 

Date Per  100     Minimum     Covering 

Under  Ownership  of—  Month.    Yeatr.  Cu.  Ft.    Mon'ly  Bill.  Amt.Cu.Ft. 

Company    20c  $1.50  'SOO? 

City    Feb.         1902         15  to  10.2  1.50  1100? 

City    June         1902         15  to  10.2  1.00  1100? 

City    Oct.  1902  7c  1.00  1100 

City    Oct.  1907  7c  .75  1100 

Since  the  date  of  the  report  the  minimum   monthly  bill   has  been   reduced  to  $0.50. 
•REMARKS— Over  2000  cubic  feet,  15c. 

The  value  of  the  Los  Angeles  City  Water  Company  plant  at  the  time  it  was 
acquired  by  the  city  was  placed  by  different  appraisers  at  from  $1,250,000  to 
over  $4,000,000.  The  appraisal  on  which  negotiations  were  finally  based  was 
$1,800,000.  The  purchase  price  was  $2,000,000.  If  tlie  base  valuation  was  correct 
then  the  city  paid  $200,000  or  11.1  per  cent  more  than  the  property  was  worth. 
Even  so,  it  is  generally  conceded  a  wise  move  to  make  the  purchase. 

The  city  ownership  has  been  entirely  satisfactory.  Worthless  sheet  iron  pipe 
has  been  replaced  with  standard  cast  iron  and  hundreds  of  miles  of  extensions 
made.  To  an  $1,80(),()()0  i)lant  additions  were  made  in  13  years  increasing  its 
value  to  nearly  $11,000,000.  This  accomplished  under  the  reduced  rates  above 
shown;  and  fixed  charges  for  original  purdiases  carried.  Not  profit  earned  In 
1915  over  $400,0(10.  The  Water  Department  up  to  and  including  1915  did  not 
carry  the  aqueduct  fixed  charges. 

In   1905,   the  first   bond   issue  of  $1,500,000    was   authorized   for   preliminary 

[12] 


work  on  the  aqueduct.  Since  then  large  amounts  of  bonds  have  been  voted  for 
the  construction  of  the  aqueduct  and  in  addition  for  power  development  along 
the  aqueduct,  and  for  building  a  harbor  at  San,  Pedro. 

The  aggregate  amounts  of  the  bond  issues  for  these  and  other  purposes  are 
given  in  Table  No.  6.  It  is  not  the  purpose  to  discuss  the  harbor  in  this  report, 
other  than  to  remark  that  generally  the  ownership  and  control  by  a  municipality 
over  its  harbor  facilities  is  essentially  desirable. 

Bonded    Debt,    Earnings,    Etc. 

In  comparing  the  bonded  indebtedness  of  seven  other  American  and  a,  like 
number  of  German  cities,  as  shown  in  Table  No.  5,  it  will  be  seen  that  the  Los 
Angeles  people  have  been  optimistic  of  the  future.  In  only  one  other  city 
shown,  Dusseldorf,  does  the  per  capita  indebtedness  approach  that  of  Los  Angeles, 
$100.50  and  $110.33  respectively.  The  amount  of  the  per  capita  debt,  represented 
by  revenue  producing  utility  bonds,  is  for,  Dusseldorf  $78.26,  Los  Angeles  $81.88. 

In  addition  to  the  bond  issues  above  referred  to,  the  city  constructed  the 
municipal  railway  on  San  Pedro  street  from  Aliso  to  Ninth  street,  at  a  cost 
of  a  little  over  $248,350.  This  has  been  leased  to  the  Pacific  Electric  Railway 
for  a  term  of  seven  years.  For  the  use  of  the  track  the  railway  company  pays 
the  city  annually  5  per  cent  of  the  cost  of  construction,  plus  $1200.  As  nothing 
was  included  in  the  contract  for  depreciation  the  city  suffers  a  loss  of  from 
twenty  to  twenty-five  thousand  dollars  a  year  (based  on  a  ten  to  twelve  year 
life  of  track). 

The  total  issue  of  bonds  designated  as  revenue  producing  is  $40,939,850  or 
as  previously  stated  $81.88  per  capita.  Add  to  this  the  possible  loss  of  $240,000 
on  the  contract  with  Pacific  Electric  Railway  for  the  use  of  the  San  Pedro  street 
line  and  we  get  $41,187,850,  or  $82.37  per  capita. 

Without  any  revenue  returns  from  any  of  these  enterprises  the  annual  tax 
levy  per  capita  must  provide  for:  Interest,  about  $3.70;  sinking  funds,  about  $2.00. 
This  gives  a  per  capita  total  of  about  $5.70  or  a  gross  total  of  about  $2,850,000 
for  the  entire  city. 

The  net  earnings  of  the  water  department  for  1915  was  $410,000.  None  of 
this,  however,  has  been  taken  to  apply  to  the  interest  and  sinking  fund  of  the 
aqueduct  and  water  bonds,  which  in  1914-15  amounted  to  about  $1,820,000  and 
was  all  paid  out  of  the  annual  tax  levy,  except  $128,940.  The  interest  and  sinking 
fund  for  harbor  bonds  was  $368,150.  The  net  earnings  of  the  Harbor  Department 
above  operating  expenses  was  $40,000.  That  left  a,  balance  of  $328,150  to  be 
taken  care  of  by  taxation.  (Since  the  above  was  written  the  data  for  1915-16 
has  become  available.  The  Water  Department  paid  in  about  the  same  as  the 
year  previous.     The  Harbor  Department  turned  in  no  revenue  to  the  treasury). 


FUTURE  MUNICIPAL  OWNERSHIP  IN  LOS  ANGELES 

This  subject  will  be  considered  under  four  divisions:  First — Transportation 
or  street  railways.  Second — Water  supply.  Third — Gas  supply.  Fourth — Electric 
supply.  It  is  not  the  intention  to  go  fully  into  the  street  railway  and  trans- 
portation and  water  questions  in  this  report.  (The  telephone  and  telegraph 
properly  belong  to  the  Federal  Postal  Service.) 

1.     THE   MUNICIPAL   RAILWAY,   ETC. 

The  city  has  the  right  to  terminate  the  contract  with  the  Pacific  Electric 
Railway  on  one  year's  notice.  In  view  of  the  manifest  inequity  and  injustice  of 
the  contract  to  the  tax-payers,  we  believe  the  city  is  fully  justified  in  undertak- 
ing to  serve  notice  on  the  company  that  the  present  contract  will  be  terminated 
and  a  new  one  required  on  terms  that  will  insure  the  city  against  any  such  loss 
as  it  now  sustains  of  from  $20,000  to  $25,000  a  year. 

A  practical  move  toward  municipal  ownership  may  be  accomplished  by  the 
city  making  necessary  extensions  of  transportation  lines,  building  tunnels,  etc., 
and  leasing  the  operating  rights  for  adequate  rentals,  until  such  time  as  the 
municipality  is  ready  to  undertake  railway  and  transportation  operation. 

The  Harbor  Department  has  made  substantial  and  commendable  progress 
toward  establishing  rail  lines  to  serve  the  harbor.  This  work  should  be  con- 
tinued and  the  policy  established  of  the  city  ultimately  owning  or  controlling 

[13] 


all  rail  and  water  terminals,  together  with   marketing  facilities   within   the   city 
limits. 

2.     WATER  SUPPLY 

The  aqueduct  water  was  brought  into  the  San  Fernando  Valley  over  two  years 
ago.  Up  to  the  present  we  have  made  little  use  of  it  and  are  securing  only 
small  returns. 

This  water  is  intended  primarily  for  "future  domestic  supply."  The  present 
immediate  use  of  the  major  portion  can  be  devoted  only  in  the  main  to  irriga- 
tion purposes  as  "surplus." 

Table  No.  6  shows  the  total  outstanding  bond  issue  for  water  to  be  $25,869,850 
or  $51.74  per  capita.  The  major  portion  of  these  bonds  are  of  the  40-year  series, 
with  from  one-thirty-fourth  to  one-fortieth  of  the  series  retired  each  year  through 
the  redemption  or  sinking  funds.  At  the  present  time  the  annual  per  capita 
sinking  fund  amounts  to  about  $1.66.  The  per  capita  interest  is  about  $2.33.  Total 
annual  charge  per  capita  ta  carry  the  aqueduct  $3.99.  The  average  monthly 
water  bill  per  meter  in  the  city  at  the  preesnt  time  is  from  $1.50  to  $1.60.  It  is 
estimated  by  the  Bureau  of  Water  Supply  that  one  meter  serves  on  the  average 
five  persons.  BYom  an  average  monthly  bill  of  $1.55  we  get  the  total  average 
annual  bill  of  $18.60.  Reduced  to  the  per  capita  basis  gives  $3.72.  If  we  now  add 
to  the  per  capita,  meter  rate  of  $3.72  the  aqueduct  bond  interest  and  sinking  fund 
of  $3.99  we  get  a  total  annual  per  capita  water  rate  of  $7.71. 

If  at  the  present  time  the  cost  of  the  water  service,  including  fixed 
charges  on  the  city's  aqueduct  or  future  water  supply,  were  taken  care  of  by  the 
the  rates,  instead  of  in  part  by  the  tax  levy,  they  would  have  to  be  increased 
to  over  double  those  now  charged,  or  to  about  $38.55  as  the  annual  bill.  This 
means  that  the  city  could  not  afford  to  tax  itself  and  sell  water  to  territory  out- 
side the  city  boundary  at  the  same  rate  that  it  is  now  selling  inside.  It  may 
be  remarked  that  reports  from  other  cities  show  rates  as  high  as  26^40  and 
as  low  as  3c  per  100  cubic  feet,  as  compared  to  the  approxiamte  14y2C  rate  in- 
dicated above  necessary  to  make  the  Los  Angeles  system  self-supporting.  With 
the  aqueduct  water  in  service,  enough  revenue  should  be  derived  to  care  for  the 
interest  and  sinking  funds  of  the  bonds,  as  well  as  to  make  necessary  extensions 
and  return  a  profit. 

An  average  meter  bill  per  annum  of  $18.60,  at  7c  per  100  cubic  feet  indicates 
a  consumption  of  26,571  cubic  feet  per  meter.  That  amount  at  the  prevailing  rate 
for  most  outside  cities  of  15c  per  100  cubic  feet  amounts  to  $39.86.  The  present 
city  charge  of  $18.60  plus  interest  and  sinking  fund  of  $19.95  amounts  to  $38.55 
or  a  saving  of  $1.31  per  meter,  or  (five  people  per  meter)  to  $0.26  per  capita 
per  annum.  As  the  bonds  are  redeemed  and  the  interest  charges  gradually  re- 
duced the  net  saving  per  capita  gradually  increases,  until  the  end  of  the  last 
bond  period  when  both  interest  and  sinking  fund  charges  disappear. 

From  the  fact  that  all  real  property  within  the  city  limits  shares  in  the 
potential  benefits  of  the  large  assured  future  water  supply,  the  annual  direct 
tax  levy  for  interest  and  sinking  fund  on  the  aqueduct  bonds  may  be  considered 
equitable.  Present  water  users  should  not  be  made  to  pay  for  the  benefits  to 
land  not  in  use. 

In  the  committee's  estimation  the  city  should  lose  no  time  in  perfecting  ar- 
rangements whereby  the  widest  distribution  of  water  can  be  secured,  on  an 
equitable  basis,  to  those  desiring  Its  use. 

3.     GAS  SUPPLY 

Tables  Nos.  2  and  3  show  that  only  five  out  of  195,  or  2.56';^r  of  the  largest 
American  cities  own  their  own  gas  supply.  Supplying  gas.  as  before  stated,  1b 
not  very  different  from  supplying  water.  In  fact,  the  equipment  for  supplying 
natural  gas  is  almost  identical  with  that  for  water  service.  The  service  is  ren- 
dered principally  through  the  use  of  machinery  and  pipe  conduits,  the  number 
of  persons  employed   being  relatively   small. 

Los  Angeles  has  been  carrying  on  a  gas  supply  and  rate  controversy  extend- 
ing something  over  three  years,  and  no  definito  settlement  is  yet  In  sight.  Con- 
troversies of  this  nature  are  not  peculiar  to  Los  Angeles. 

About  767,  of  the  gas  HUi)ply  for  Loa  Angeles  is  furnished  by  the  Ix)3  An- 
geles Gas  and  Electric  Corporation.  Generally  the  price  of  gas  in  Loa  Angeles  has 
been  based  on  the  etiuipment  and  service  of  this  concern.  It  has  also  been  the 
center  of  the  controversy  over  rates  and  service. 

[14] 


The  corporation's  sales  of  gas  for  1915  were  3,826,282  thousand  cubic  feet, 
of  mixed  half-and-half  artificial  and  natural,  at  68c  per  thousand.  The  price 
for  natural  gas  in  other  cities  of  the  United  States  is  from  27  to  40c  or  an  average 
for  three  different  cities  of  32.3  cents.  There  appears  to  be  more  than  ample 
natural  gas  available  to  serve  the  needs  of  Los  Angeles.  An  increase  of  20% 
in  the  average  price  for  natural  gas  in  other  cities  gives  less  than  39c  per  1000 
cubic  feet. 

The  total  depreciated  value  of  the  gas  equipment  of  the  Los  Angeles  Gas  and 
Electric  Corporation,  as  determined  by  the  State  Railroad  Commission  is 
$10,747,000.  The  total  amount  of  outstanding  bonds  of  the  corporation  is  about 
$8,225,000,  bearing  5%   interest. 

It  may  be  fairly  assumed  that  the  prices  for  natural  gas  in  other  cities  have 
generally  been  established  by  the  companies  furnishing  the  service.  If  such  is 
the  case  the  presumption  is  natural  that  they  havci  allowed  themselves  a  fair 
profit.  As  above  stated,  an  addition  of  20%  to  the  average  price  for  other  cities 
gives  less  than  39  cents  per  1000  cubic  feet.  In  taking  over  the  major  portion 
of  the  water  service,  the  city  was  able  to  reduce  rates  to  from  one-half  to  one- 
third  of  that  charged  by  the  private  companies.  If  that  is  any  criterion,  it  may 
be  fair  to  assume  that  if  the  natural  gas  service  were  carried  on  at  the  least 
possible  cost  without  profit,  that  the  rate  could  be  reduced  to  about  38c  per 
1000  cubic  feet,  approximately  44%  less  than  the  present  rate,  and  20%  higher 
than  the  average  paid  by  other  cities.  A  saving  of  30c  per  1000  cubic  feet  on 
3,826,282  thousand  cubic  feet  amounts  to  $1,147,885  annually. 

The  Los  Angeles  Gas  &  Electric  Corporation,  according  to  reports  of  the 
recent  hearing  before  the  State  Railroad  Commission,  claims  it  is  entitled  to 
returns  of  891-  on  a  valuation  of  $14,000,000  or  $1,120,000  annually.  This  is  about 
$600,000  above  the  normal  interest  charges  on  the  valuation  fixed  by  the  Railroad 
Commission.  We  have  not  had  the  time  or  facilities  to  undertake  an  exhaustive 
investigation  and  analysis,  but  from  such  study  as  we  have  made  there  seems  a 
fair  presumption  that  from  $500,000  to  $1,000,000  could  be  saved  annually  to  the 
gas  consumers  of  the  city  through  the  acquisition  of  this  one  concern. 

4.     ELECTRIC    SUPPLY 

Again  referring  to  Tables  2  and  3,  we  find  that  of  the  195  largest  American 
cities  there  considered  only  19,  or  9.7%,  own  electric  plants.  Of  these  same 
cities  150,  of  77%,  own  water  supplies. 

It  is  not  necessary  to  recount  the  steps  already  taken  by  the  City  of  Los 
Angeles  to  establish  a  municipal  electrical  power  service. 

Tables  7  and  8  give  in  kilowats  and  the  per  cents  of  the  whole  for  all  power 
concerns  now  serving  Log  Angeles  and  vicinity  together  with  the  units  being 
established  and  proposed  by  the  city  as  part  of  the  aqueduct  project.  Item  one 
of  Table  8  shows  that  the  city's  present  development  is  28,125  out  of  a  total  of 
315,225  K.  W.,  or  8.9%.  Item  three  of  Table  No.  8  gives  future  city  development 
as  126,820  out  of  a  total  of  413,920  K.  W.  for  all  or  30.6%.  Even  with  the  total 
future  development  proposed  by  the  city  it  does  not  appear  that  a  large  enough 
percentage  will  be  under  municipal  control.  The  above  totals  are  for  all  of 
Southern  California.    The  present  requirement  within  the  city  is  about  50,000  K.  W. 

In  connection  with  the  requirement  the  city  has  ahead,  of  establishing  a 
distributing  system  we  believe  the  move  might  very  well  be  considered  of  taking 
over  the  entire  electric  equipment  and  plants  of  both  the  Los  Angeles  Gas  and 
Electric  Corporation  and  the  Southern  California  Edison  Company.  Item  one  of 
Table  No.  7  gives  the  combined  capacity  of  the  "city  present"  and  all  others  as 
315,225  K.  W.  Item  three  gives  city's  future  combined  with  all  others  413,920  K.W. 
Deduct  the  Pacific  Light  and  Power  from  each  and  the  suggested  combination 
stands:  For  city  present  135,775  K.  W.,  or  43.7%  of  the  total;  for  city  future 
234,470  K.  "W.,  or  56.6%  of  the  total.  As  the  greater  portion  of  the  output  of 
the  Pacific  Light  and  Power  Corporation  equipment  is  serving  railway  purposes, 
the  city  would  gain  a  fair  control  of  the  municipal  requirement  through  the  sug- 
gested combination  as  indicated  by  the  above  per  cents. 

Out  of  120,712  customers  the  Los  Angeles  Gas  and  Electric  Corporation  now 
serves  39,619,  or  32.8%,  and  the  Southern  California  Edison  Company  53,189,  or 
44%.     These  combined  give  a  total  of  92,806,  or  77%. 

For  the  city  to  duplicate  the  existing  distributing  systems  will  entail  a 
large  degree  of  economic  waste.  On  the  other  hand  to  take  over  the  distributing 
systems  of  the  present  companies  and  deprive  them  of  customers  for  their  prod- 
ucts will  call  for  more  or  less  severance  damages. 

[15] 


In  view  of  the  facts  just  stated  we  believe  the  city  will  be  fully  justified  In 
undertaking  as  before  suggested,  to  acquire  all  of  the  electric  equipment  of 
the  two  companies  above  considered. 

It  must  be  remembered  that  if  the  city  depends  on  the  aqueduct  alone  as  a 
source  of  power,  it  will  have  as  competitors  in  the  field  the  three  present  com- 
panies, completely  tied  in  with  each  other  (with  lines  and  substations  within 
the  city  at  least)  and  having  many  sources  of  supply,  both  steam  and  hydro- 
electric. 

TABLE  NO.  7 

RATED   CAPACITY   IN   KILOWATTS    OF   ELECTRIC   POWER   CONCERNS    IN 
LOS    ANGELES    AND   VICINITY 

— Capacity  in  Units  and  Per  Cents — 
Current  Developed  by 


OWNED  BY  AND  COMBINATION 
GROUPS  OF 

Total. 

1.  Southern  California  Edison  Company..     89,850 

Los  Angeles  Gas  &  Electric  Corporation     17,800 

Pacific  Light  &  Power  Corporation 179,450 

City    of    Los    Angeles,     Plant    No.     1 

(present)    28,125 


Water 

P.C.  of 
K.  W.  Whole. 
31,875       35.5 


Steam 

P.C.  of 
K.  W.  Whole. 
57,975       64.5 


132,650 
28,125 


Total  315,225     192,650 


2.  Total  private  companies 287,100 

City  of  L.  A.  Plants  1  &  2  (full  develop)     84,750 


164,525 
84,750 


73.9 
100.0 

61.1 

57.3 
100.0 


17,800 
46,800 


Total    Private    Cos.    &    City    (full 

develop)   371,850 

City  total  future  development 126,820 

Private  companies  total 287,100 


249,275   67.0 


126,820 
164,525 


100.0 
57.3 


Total  City  Future  &  Private  Cos...   413,920     291,345       70.4 


4.  L.  A.  Gas  and  Elec.  &  So.  Cal.  Edison 

Co.  Total 107,650 

City  of  L.  A.  No.  1  (present  development)    28.125 


31.875 
28,125 


29.6 

100.0 


122,575 
122,575 

122,575 

122,575 
122,575 

75.775 


Total  L.  A.  Gas  &  El.  &  S.  C.  Edi- 
son &  City 135,775 

5.  City  Plants  Nos.  1   &  2   (full  develop- 

ment)  and  L.  A.  Gas  &  Elec.  Co.  & 

So.  Cal.  Edison  Co 192,400 

6.  City  Plant  No.  1  (present)  &  S.  C.  Edi- 

son Co 117.975 

7.  City  Plant*  No.  1  (present)  &  L.  A.  Gas 

&  El 45,925 

8.  City  Plants  1  &  2  (full  development)  & 

S.  C.  Edison  Co 174.600 

9.  City  Plants  1  &  2  (full  development)  & 

L.  A.  Gas  &  Elec 102.550 

10.  City  Total    (future)   &   S.  C.  Edison  & 

L.  A.  Gas 234,470 

11.  City   Total    (future)    &   Sou.   Cal.   Edi- 

son Co 216,670 

12.  City    Total    (future)    &    L.    A.    Gas    & 

Elec.  Co. 144,620 

[16] 


116,625 

60.6 

75.775 

60,000 

50.8 

57,975 

28,125 

61.2 

17,800 

116.625 

66.8 

57,975 

84,750 

82.6 

17,800 

158.695 

67.7 

75.775 

158.695 

73.2 

57,975 

126,820 

87.7 

17.800 

100.0 
26.1 


38.9 
42.7 

33.0 

42.7 
29.6 

70.4 


60,000        44.2        75,775        55.8 


39.4 


49.2 


38.8 


33.2 


17.4 


32.3 


26.8 


12.3 


TABLE  NO.  8 

ELECTRIC     POWER    DEVELOPMENT     IN     LOS    ANGELES     AND     VICINITY, 
TOTAL  AND  COMPARATIVE  AMOUNTS  OF  COMBINED  PRODUCTION 

' Amount  in  K.  W.  and  Per  Cents 

■  i;  I  -^'^l  City -Companies- 

GROUP  COMPOSED  OF  *        Total  P.  C.  of  P.C.  of 

K.  W.        K.  W.     Total.    K.  W.    Total. 

1.  City  Plant  No.  1   (present),  S.  C.  Edi- 

son Co.,  L.  A.  Gas  &  Elec.  Co.  &  Pa- 
cific Light  &  Power  Corp 315,225       28,125         8.9     287,100       91.1 

2.  City  Plants  1  &  2   (full  development), 

S.  C.  Edison,  L.  A.  Gas,  &  P.  L.  & 

P.   Co 371,850       84,750       22.8     287,100       77.2 

3.  City   Total   Future,   Edison    Co.,   L.   A. 

Gas  &  El.,  &  P.  L.  &  P.  Co 413,920     126,820       30.6     287,100       69.4 

4.  City  Plant  No.  1  (present),  Edison  Co., 

&  L.  A.  Gas  &  Elec.  Co 135,775       28,125       20.7     107,650       79.3 

5.  City  Plants  1  &  2  (full  development)  & 

Edison  Co.,  &  L.  A.  Gas  &  Elec.  Co..    192,400       84,750       44.0     107,650       56.0 

6.  City  Plant  No.  1  (present)  &  Edison  Co.  117,975       28,125       23.9       89,850       76.1 

7.  City  Plant  No.  1  (present)  &  L.  G.  Gas 

&  Elec.  Co 45,925       28,125       61.2       17,800       38.8 

8.  City  Plants  1  «&  2    (full  development) 

&  Edison  Co 17^600       84,750       48.5       89,850       51.5 

9.  City  Plants  1  &  2  (full  development)  & 

L.  A.  Gas  &  Elec.  Co 102,550       84,750       82.6       17,800       17.4 

10.  City  Total  Future,  Edison  Co.,  &  L.  A. 

Gas  &  Elec.  Corp 234,470     126,820       54.1     107,650       45.9 

11.  City  Total  Future  &  So.  Cal.  Edison  Co.  216,670     126,820       48.5       89,850       51.5 

12.  City    Total    Future    &    L.    A.    Gas    & 

Elec.  Co 144,620     126,820       87.7       17,800       12.3 

REMARKS — Group  numbers  correspond  to  those  in  Table  No.  7  and  are  in- 
tended for  convenience  in  comparison. 

It  may  be  objected  that  much  of  the  generating  equipment  of  the  companies 
is  antiquated  and  inefficient.  That  is  undoubtedly  true.  If  purchased,  however, 
it  should  be  estimated  and  paid  for  only  as  such.  The  inefficiency  of  a  certain 
portion  of  an  equipment  which  is  maintained  only  to  bridge  over  temporary  break- 
downs or  for  taking  care  of  part  of  the  peak  load  for  a  short  period  is  of  no 
serious  disadvantage. 

The  depreciated  value  of  the  electric  equipment  of  the  Los  Angeles  Gas  and 
Electric  Corporation  is  probably  between  four  and  five  million  dollars.  The 
depreciated  physical  value  of  the  Southern  California  Edison  Company  equipment 
is  probably  somewherq  between  $18,000,000  and  $20,000,000.  If  obsolesence  of 
antiquated  machinery  is  taken  fully  into  account  the  value  for  the  equipment  of 
either  of  these  companies  may  be  even  less  than  the  figures  indicated.  We  have 
no  exact  figures  for  the  value  of  either  company's  property  or  plants.  All  of 
the  property  of  both  companies  outside  as  well  as  inside  the  city  limits,  is  con- 
sidered. 

At  the  recent  hearing  before  the  State  Railroad  Commission  one  witness 
claimed  that  the  value  of  the  Southern  California  Edison  Company's  plant  and 
business  was  $37,631,000.  Another  witness  claimed  that  a  return  of  8%%  on  the 
investment  was  insufficient.  The  company  has  in  the  neighborhood  of  $17,000,000 
5%  bonds  outstanding.  The  difference  between  high  returns  on  a  high  valuation, 
and  the  same  business  conducted  without  profit  will  amount  to  nearly  two  million 
and  a  half  dollars  a  year  for  this  property  alone. 

The  bonded  debt  of  the  Los  Angeles  Gas  and  Electric  Corporation  is  given  in 
the  discussion  on  gas  (covering  gas  and  electric  property)  as  $8,225,000. 

[17] 


MAGNITUDE  OF  THE  SUGGESTED  UNDERTAKING 

The  total  value  of  the  two  electric  plants  and  the  gas  plant  Is  probably 
somewhere  between  thirty-three  and  thirty-six  million  dollars. 

A  proposal  for  the  city  to  acquire  any  or  all  of  these  properties  will  prob- 
ably be  met  at  once  with  the  objection  that  tha  city  is  already  overburdened 
with  bond  issues  of  the  revenue-producing  type.  That  is  true  to  a  degree.  As 
indicated  previously,  however,  we  must  adopt  a  policy  to  secure  larger  returns 
on  the  money  already  invested. 

It  should  be  understood  that  the  properties  proposed  to  be  taken  over  are 
going  concerns  and  are  not  only  paying  their  way  but  returning  a  good  profit  to 
their  owners.  It  is  for  the  purpose  of  saving  this  profit  to  the  consumers  that 
the  proposal  is  made  for  undertaking  municipal  ownership. 

The  City  Charter,  Section  2,  subdivision  (7)  (A)  (B)  and  (C)  and  Section 
192,  subdivision  (2),  contains  provisions  for  taking  over  public  utility  enter- 
prises. These  provisions  seem  to  be  adequate  and  equitable.  We  have  legal 
opinion,  stating  the  belief  that  the  charter  provisions  and  the  state  law  are 
adequate  for  taking  over  the  properties  by  condemnation  if  necessary,  both  in- 
side and  outside  the  city  limits.  We  need  not  be  timid  about  the  size  of  our 
enterprises  when  we  undertake  them  honestly  and  with  intelligence. 

Let  us  state  the  case  very  plainly.  If  the  city  owned  these  utilities  at  the 
present  time  we  should  be  saving  from  one  to  two  million  dollars  annually  to  the 
consumers  which  now  goes  to  the  owners  in  profits.  Not  profits  alone  are  to  be 
considered.  The  removal  of  that  amount  of  utility  value  from  the  field  of  political 
activity  and  pressure  is  one  of  the  most  important  objects  to  accomplish  through 
municipal   ownership. 

Our  American  cities  have  too  long  been  run  in  the  interests  of  the  utility 
corporations  and  public  work  contractors.  We  continually  hear  the  charge  of 
inefficiency  in  municipal  administration  and  corruption  and  graft  in  the  public 
service.  These  very  evils,  however,  are  chargeable  mostly  to  the  pernicious  in- 
fluences just   mentioned,  together  with   other  selfish    interests. 

America's  democracy  as  exemplified  in  our  cities  must  and  will  make  good. 
Let  us  therefore  take  the  lead,  in  so  far  as  we  may,  in  accomplishing  this  end, 
and  give  earnest  consideration  and  effort  to  one  of  the  most  important  factors 
in  the  accomplishment  of  this  purpose,  namely,  the  intelligent  extension  of 
municipal   ownership   of   public   utilities. 


CITY  CLUB  COMMITTEE  ON  MUNICIPAL 
OWNERSHIP 

Report  approved  September  27.  1916,  by  the  committee  and  recommended  to 
the  Board  of  Governors  for  publication: 

NOTE — Since  the   above  date  some  additional   data  has   been  obtained   and 
several  revisions  made. 


(Signed) 


MARTIN  BEKINS. 

RALPH  BENNETT. 

H.    STANLEY    BENEDICT. 

T,  E.  GIBBON. 

S.  C.  GRAHAM. 

JOHN  R.   HAYNES. 

C.  W.  KOINER. 

RAY  E.   NIMMO. 

CHARLES    K.    MOHLEU. 

Chairman. 


Ordered  printed  by  the  Club  .luno.  :w.  l'.»17. 

[18] 


SUPPLEMENTAL  REPORT  ON  THE  EXTENSION  OF 
PUBLIC  OWNERSHIP  OF  PUBLIC  UTILITIES 


In  September,  1916,  the  committee  submitted  a  report  giving  a  general  sur- 
vey of  the  ownership  of  public  utilities  in  the  United  States,  Great  Britain  and 
Germany,  together  with  the  accomplishments  of  Los  Angeles  in  municipal  owner- 
ship up  to  that  time,  and  certain  recommendations  for  future  acquisitions  and 
extensions. 

Many  complains  are  heard  about  the  high  cost  of  living,  excessive  taxes,  in- 
efficiency and  graft  in  public  service,  and  others  of  a  like  nature.  In  this  con- 
nection it  may  be  of  interest  and  value  to  show  roughly  the  actual  as  well  as 
the  relative  value  of  property  devoted  to  utility  service  and  the  cost  of  the  serv- 
ice of  different  kinds  rendered  by  the  different  governing  agencies  and  the  vari- 
ous privately  owned  utility  concerns. 

The  constant  and  rapid  concentration  of  population  in  large  centers,  the  In- 
vention, adoption  and  extensive  use  of  new  utility  appliances,  as  well  as  the 
constantly  growing  expense  of  "service"  administration,  caused  by  the  necessary 
adoption  and  extension  of  new,  scientific  and  highly  technical  functions  for  the 
general  good  of  the  community  life  and  interest,  calls  for  a  fairly  comprehen- 
sive view  and  understanding  of  the  actual  and  relative  costs  of  different  kinds  of 
community  service.  As  far  as  the  committee  is  able  to  judge,  the  general  public 
has  very  little  actual  or  comparative  information,  in  convenient  form,  on  these 
important  lines. 

The  original  report  may  very  well  be  supplemented  by  data  showing: 

First — The  approximate  value  of  property  owned  by  the  goveraing  agencies 
(when  it  can  be  given)  devoted  to  public  use;  the  value  of  municipal  or  public 
property  created,  or  carried  out  under  private  contract;  and  the  value  of  utility 
concerns  under  private  ownership,  rendering  public  service  in  the  community  or 
municipality.    . 

Second — The  actual  and  relative  annual  cost  of:  Service  rendered  to  the 
public  by  publicly  owned  and  operated  institutions;  public  work  done  under 
private  contract;  and  utility  service  rendered  by  concerns  under  private  ownership. 

Third — The  incentives  for  political  activity  and  participation  in  govern- 
mental affairs  by  the  private  interests  engaged  in  contract  work  as  well  as  those 
in  utility  service,  and  the  need  for  extending  public  ownership  of  public  service 
utilities. 

Such  information  as  was  obtainable,  with  a  reasonable  amount  of  work  and 
research,  is  given  in  tabular  form,  showing  the  gross  or  total,  the  per  capita,  and 
the  city's  portion,  together  with  the  per  cents  for  each  item.  Full  and  complete 
information  on  all  lines  was  not  obtainable. 

[19] 


1ST.  APPROXniATE  VALUE  OF  PROPERTY  DEVOT- 
ED TO  PUBLIC  SERVICE 

(a)     "Public  Service"   Property   Under   Public   Ownership 

TABLE  NO.  1 

(1)  NON-REVENUE    PRODUCING    MUNICIPAL    PROPERTY.      (CITY  AUDI- 

TOR'S REPORT,  1915.) 

Property  Values 

Per  Per 

Classification  or  Use  of  Property—                             Total.             Capita.  Cents. 

General   Government    $1,722,311              3.44  5.01 

Public  Safety    1.722,086               3.44  5.00 

Health  and  Sanitation*  (Sewers,  etc.) 6.255.976            12.51  18.20 

Communication  Avenues   (Highways,  etc.)    1.842,549              3.68  5.36 

Education!  (Library  $459,803.  Schools  $11,540,000) .  .12.000.000             24.00  34.93 

Recreation   (Parks.   Playgrounds) 10,730,089            21.46  31.22 

Charities  and  Corrections 3,481                .01  .02 

Miscellaneous   90,082                .18  .26 

Totalt     $34,366,574             68.72  100 

♦Including  Health  Department. 

tEstimated  from  School  Auditor's  Report,  1916. 

iltems  given  in  Detail  in  Auditor's  Report. 

TABLE  NO.  2 

(2)  NON-REVENUE   PRODUCING   COUNTY   PROPERTY.       (COUNTY  AUDI- 

TOR'S REPORT,  1915.) 

Property  Values 

Entire          Per            City  Per 

Classification  or  Use  of  Property —               County.     Capita.     Portion.  Cent. 

General   Government    $3,015,798       $4.31       $3,155,000  39.32 

Public  Safety    63,532           .09              45,000  .83 

Health  Conservation 253  ...  

Communication  Avs.  (Highways,  Bridges) . .   1,306.838         1.87            935,000  17.04 

Education  (Libraries,  Schools,  etc.) 168,603          .24           120,000  2.20 

Recreation    322,712           .46            230.000  4.21 

Charities  and  Corrections 2,418,038         3.45         1.725,000  31.53 

Miscellaneous   373.591           .53            265,000  4.87 

Total      $7,669,365     $10.96       $5,480,000  100 

Note — A  comparison  of  tables  1  and  2  shows  an  apparent  difference  in  classifi- 
cation of  property  devoted  to  similar  uses.  See  "Public  Safety"  and  "Charities 
and  Corrections." 


TABLE  NO.  3 
REVENUE  PRODUCING  MUNICIPAL  PROPERTY  (AUDITOR'S  REPORT.  1915) 

Property  Values 

Classification  or  Use  of  Per  Per 

Property —  Total        Capita       Cent  Remarks 

Water  Department  and   Aqueduct.  .$37,849,187       $75.70        87.16 

Electric   Plant    3.732.257  7.47  8.60 

Harbors  and   Markets* 1.842.260  3.68  4.24       Markets  $4,302 

Total $43,423,704       $86.85  100 

•The  full  value  of  the  Harbor  property  is  not  given.    It  undoubtedly  amounts 
to  several  million  dollars  more  than  given  above. 

[20] 


TABLE  NO.  4 

MUNICIPAL  PROPERTY  SUBJECT  TO  PRIVATELY  OWNED  PUBLIC  UTILITY. 
USE,  THROUGH  FRANCHISE  GRANTS 

Property  Values 

Classification  or  Use  of  Property —  Total.  Per  Capita.  Per  Cent. 

Streets  and  Public  Ways   (Land) ?112,875,000  $225.75  81.64 

Streets  and  Public  Ways  (Pavement  and 

Improvement)   25,391,605  50.78  18.36 

Total $138,266,605  $276.53  100 

(b)     Public  Service  Utility  Property,  Under  Private  Ownership. 

TABLE  NO.  5 
LOCAL    SERVICE    UTILITIES 

Property  Values 

Service  and  Name  of  Com-          Total  or  Per  Per 

pany  or  Corporation —           City  Portion.  Capita.  Cent.               Remarks 
Transportation, 

Los  Angeles  Railwayi $23,500,000  $47.00  16.74     Includes  City  Railway. 

Pacific  Electric  Railwayi 37,685,000  75.37  26.84     Total  $56,528,000. 

Telephone,  Two  Companies2 14,000,000  28.00       9.97 

Electric,  So.  Calif.  Edison  Co.2...  19,000,000  38.00  13.53 

Electric,  Pacific  Lt.  &  Pow.  Cor.2  29,000,000  58.00  20.65 
Electric,  f  Los  Angeles  Gas  & 

Gas,           I  Electric  Cor.2    14,000,000  28.00       9.97 

Gas,  Economic  Gas  Co.3 1,803,000  3.60       1.28 

Gas,  Southern  Counties  Gas  Co.s.     1,439,000  2.88      1.02 

Total $140,427,000  $280.85      100 

Remarks — The  "Property  Values"  are  only  approximate,  and  are  based  on: 
lOutstanding  bonds;  2actual  valuation  or  estimate;  soutstanding  stocks  and  bonds. 
The  per  capita  amount  for  Pacific  Electric  Railway  was  obtained  by  dividing  the 
total  outstanding  bond  issue  of  $56,528,000  by  750,000,  the  approximate  population 
served. 


TABLE  NO  6 

INTERSTATE    SERVICE    UTILITIES 

Property   Values 

Per  Per 

Service  and  Name  of  Company  or  Corporation —           Total.          Capita.  Cent. 

Telegraph,  Western  Union  (1)   (2) $128,423,727     $     1.28  7.15 

Telegraph,  Postal  Tel.  &  Cable  Co.  (1)   (2) 111,380,400          1.11  6.22 

Express,  American  Express  Co.  (1)   (3) 18,000,000            .84  1.00 

Express,  Wells-Fargo  Express  Co.    (1)    (3) 23,967,400  1.33 

Railway,  Los  Angeles  &  Salt  Lake  Ry.  (1)   (4) 81,824,000)  (  4.55 

Railway,  Atchison,  Topeka  &  Santa  Fe  Ry.  (1)  (4) . .  627,449,275)     207.69  (34.94 

Railway.  Southern  Pacific  Co.  (1)   (4) 804,619,416)  (44.81 

Total $1,795,664,218       210.92  100 

Remarks : 

(1)  Total  par  value  of  outstanding  stocks  and  bonds. 

(2)  This  service  covers  nearly  the  entire  country  and  the  per  capita  amount 
is  for  the  total  population. 

(3)  These  two  express  companies  do  about  fifty  per  cent  of  the  total  business 
of  the  country,  or  in  other  words,  serve  about  half  of  the  population.  On  that 
basis  the  per  capita  share  of  their  value  is  about  $0.84.  The  total  for  Los  Angeles 
is  $420,000. 

[21] 


(4)  The  per  capita  value  of  $207.69  is  that  of  the  par  value  of  all  outstanding 
stocks  and  bonds  ol  all  roads  in  the  United  States  divided  by  the  entire  popula- 
tion. For  the  major  portion,  the  market  value  is  at  or  a  little  below  par.  The 
market  value  is  probably  not  far  from  $1,758,000,000  for  the  three  railways. 

The  total  par  value  of  all  outstanding  railway  securities  amounts  to: 

Stocks  . .  .$  8,635,835,000 
Bonds  . . .  12,133,064,000 
Total $20,768,899,000  -f- 100,000,000  =  $207.69  =  per  capita  portion. 

The  above  per  capita  amount  apportioned  according  to  population  gives  for 
Los  Angeles  a  total  of  $103,845,000. 

The  total  mileage  of  the  three  interstate  railways  reaching  and  serving  Los 
Angeles  is  23,507  miles,  amounting  to  9.2%  of  the  entire  amount  for  the  country. 

In  view  of  the  foregoing,  table  No.  6  may  very  well  be  rewritten  in  the  fol- 
lowing form: 


TABLE  NO.  7 

VALUE  OF  INTERSTATE  SERVICE  UTILITIES  PROPERTY  (SUMMARY) 

Property  Values 

Total  Combined     Per  Credited  to  Per 

Kind  of  Service —  Systems.  Capita.      City  of  L.  A.        Cent. 

Telegraph   (Two  Companies) i $    239,804,100       $     2.40       $     1,200,000  1.13 

Express    (Two  Companies) 2 41,967,400  .84  420,000  .39 

Railway    (Three   Companies)3 1,513,892,700         207.69         103.845,000         98.48 

Total $1,795,664,200       $210.93       $105,465,000  100 

'Per  capita  for  entire  population  of  the  United  States. 
-Per  capita  for  one-half  of  the  entire  population  of  the  United  States. 
3Per  capita,  for  value  of  all  the  railways  of  the  United  States  divided  by  the 
entire  population. 

The  value  credited  to  Los  Angeles,  in  each  case,  is  obtained  by  multiplying 
the  per  capita  amount  by  500,000,  the  estimated  population  in  1915. 


TABLE  NO.  8 

SUMMARY  OF  PROPERTY  VALUES,  DEVOTED  OR  APPORTIONED  TO 

PUBLIC  SERVICE  IN  LOS  ANGELES.  GROUPED  UNDER  REVENUE 

AND  NON-REVENUE  PRODUCING 

Property  Values 

Per  Cents  of 

Total,  City  or        Per        Sub-     Grand 

Kind  of  Service  and  Ownership—  City  Portion.      Capita.     Total.    Total, 

Non-Revenue  Producing 

Municipal  Property    $  34,366.574  $  68.73  19.29  7.35 

County  Property   5,480,000  10.96  3.08  1.17 

Municipal  Property,  Subject  to  Franchise 

Grants    (Streets,   Etc.) 138,266.605  276.54  77.63  29.5S 

First  Sub-Total $178,113,179     $356.22        100         38.11 

Revenue  Producing 

Municipal   l'roi)ortv    43,423,704  86.85  15.01  9.29 

Private  I'roperty,  Local  Service 140.427.000  280.85  48.53  30.04 

Private  Property,  Interfctalo  Service 105,465.000  210.93  36.46  22.56 

Second  Sub-Total $289,415,704     $578.63        100         61.8» 

Grand  Total 467.428.883       834.85  100 

[22] 


TABLE  NO.  9 

SUMMARY  OF  PROPERTY  VALUES,  DEVOTED  OR  APPORTIONED  TO  PUB- 
LIC SERVICE  IN  LOS  ANGELES,  GROUPED  UNDER  PUBLIC 
AND    PRIVATE    OWNERSHIP 

Property  Values 

Per  Cent  of 

Total,  City  or        Per        Sub-     Grand 

Kind  of  Ownership  and  Service —  City  Portion.     Capita.     Total.    Total. 

Publicly  Owned  Property 

Non-Revenue   Producing,   City $34,366,574  $68.73  41.27  7.35 

Non-Revenue  Producing,  County 5,480,000  10.96  6.58  1.17 

Revenue  Producing,  City  43,423,704  86.85  52.15  9.29 

First  Sub-Total $  83,270,278     $166.54        100         17.81 

37.59 

Non-Revenue  Producing,  City,  Subject  to  Pri- 
vately Owned  Utility  Use,  Through  Fran- 
chise Grants    (Streets,   Etc.) 138,266,605       276.53       62.41       29.58 

Second  Sub-Total $221,536,883     $443.07        100         47.40 

Privately  Owned  Property 

Revenue  Producing,  Utility,  Local 140,427,000       280.85       57.11       30.04 

Revenue  Producing,  Utility,  Interstate 105,465,000       210.93       42.89       22.56 

Third  Sub-Total $245,892,000     $491.78        100         52.60 

Grand  Total 467,428,883     $934.85  100 

An  inspection  of  Table  No.  9  shows  that  the  total  city  owned  property  and 
the  city's  share  of  the  county  owned  (omitting  "Streets  and  Ways,"  subject  to 
franchise  grants),  devoted  to  public  service,  amounts  to  $83,270,278.  Of  this 
amount  a  little  over  one-half  or  $43,423,704  is  devoted  to  so-called  revenue  pro- 
ducing service.    The  greater  portion  of  this,  $37,849,187  or  87%  is  for  water  service. 

The  balance  of  the  property  credited  to  the  city  for  utility  service  is  under 
private  ownership  and  amounts  to  $245,892,000. 

Table  No.  5  shows  the  total  Pacific  Electric  Railway  bond  issue  to  be  $56,- 
528,000,  or  $18,843,000  more  than  credited  to  "City  Service." 

Table  No.  7  shows  the  total  value  of  outstanding  securities  of  concerns  ren- 
dering service  to  Los  Angeles  as  $1,793,664,200,  or  $1,690,199,200  more  than  credited 
to  "City  Service."  Together  these  "Outside  Service"  items  amount  to  $1,709,042,200 
which  was  not  included  in  the  city  service  of  the  tables.  This  added  to  the  amount 
listed  for  "City  Service"  gives  a  total  of  $1,954,943,200,  of  private  property  owner- 
ship, "interested"  in  the  city  public  utility  service. 

Table  No.  4  shows  the  land  value  of  "Streets  and  Public  Ways"  as  $112,875,000 
and  the  value  of  "Street  Paving,  Etc."  at  $25,391,605,  or  a  total  of  $138,266,605. 
The  property  represented  by  this  value  is  all  subject  to  franchise  rights  for  carry- 
ing on  the  city  public  utility  service,  under  private  ownership. 

The  value  of  public  property  subject  to  private  ownership  franchise  rights 
added  to  the  value  of  privately  owned  utility  service  property,  gives  a  total  of 
$2,093,200,805  values,  subject  to  private  ownership  influence,  back  of  "City  Service." 

In  addition  it  should  be  noted  that  the  $25,391,605,  given  as  the  value  of  "Pav- 
ing," has  been  "Created"  under  private  contract.  The  major  portion  of  the  item 
of  $6,255,976  for  "Health  and  Sanitation,"  as  well  as  $12,000,000  of  school  property 
and  other  items  of  importance,  are  the  creation  of  private  contracts,  or  subject  to 
real  estate  jobbing  influences.     The  total  of  these  items  amounts  to  $43,647,581. 

In  1915  the  Harbor  Department  had  work  done  under  private  contract  amount- 
ing to  $867,808,  with  an  addition  of  $68,896  spent  on  street  contract  work. 

Without  farther  comment  on  property  values  at  this  time  we  will  now  give 
consideration  to  the  annual  cost  of  different  kinds  of  public  service  rendered  by 
public  and  private  ownership  undertakings. 

[23] 


2ND.     APPROXIMATE    TOTAL,    PEE    CAPITA  AND 
COMPARATIVE,  ANNUAL  COST  OF 
PUBLIC  SERVICE 

(a)      Under  Public  Ownership. 

TABLE  NO.  10 

(1)  ANNUAL  COST  OF  NON-REVENUE  PRODUCING  CITY  SERVICE.  (FROM 
U.  S.  CENSUS  REPORT,  1915) 

Cost  of  Service 

Per  Per 

Kind  of  Service  Rendered —                                                Capita.        Total.  Cent. 

General  City  Government    $3.00       $1,499,119  12.10 

Public  Safety    3.77         1,882,556  15.19 

Public  Health  ($107,268)   Sanitation   ($675,871) 1.57           783,139  6.32 

Avenues  of  Communication  (Highways) 4.16         2,080,290  16.78 

Education  (Library  $180,000,  Schools  ^4,141,000)* 9.65        4,825,000  38.92 

Recreation 71            356,394  2.87 

Charities 1.19            597,225  4.82 

General  and  Miscellaneous 74           371,743  3.00 

Total $24.79     $12,395,466  100 

•Amount  for  schools  estimated  from  School  District  Report. 

TABLE  NO  11 

(2)     NON-REVENUE     PRODUCING     COUNTY     SERVICE. 
(AUDITOR'S    REPORT,    1915) 

Cost  of  Service 

County       Per           City  Per 

Kind  of  Service  Rendered —                                    Total.     Capita.    Portion.  Cent. 

General    County    Government $1,614,338     $2.31     $1,155,000  18.36 

Public  Safety    381.825         .55          275,000  4.34 

Conservation  of  Health 7.022         .01              5,000  .08 

Avenues  of  Communication    (Highways) 2,242.759       3.20      1,602,000  25.51 

Recreation    119,210        .17           85.000  1.36 

Charities 1,192,265       1.70          850,000  13.56 

Miscellaneous    621.856         .89          445,000  7.07 

Interest  and  Debt  Redemption 1,096,773       1.57         785.000  12.48 

Payments  for  Objects  of  Trust 366.697         .52          260.000  4.17 

Investments  Purchased   1.148.701       1.64         820.000  13.07 

Total $8,791,446  $12.56     $6,282,000  100 

TABLE  NO.  12 

(3)  ANNUAL  COST  OF  REVENUE  PRODUCING  UTILITY  SERVICE,  CITY 

Cost  of  Service 


Per  Per 

Kind  of  Service—  Capita.      Total.       Cent. 

Water,    (  Servicei  $1,748,000  $3.49  ) 

Water,    (Interest   and   Redemption 1.820.000  3.64  j  $7.13     $3,568,000     82.68 

Electric,  Interest  and  Redemption .64  .64  319,300       7.40 

Harbor,    (  Service     60,361  .12  ) 

Harbor,    /Interest   and    Redemptions..      368.000  .73  (  .85  428.361       9.92 


Total $8.62     $4,315,661      100 

Remarks: 

'From  14th  Annual  Report  of  Public  Service  Commission,  1915. 
iiCity  Auditor's"  Report.  1915. 

[24] 


"While  the  amount  shown  for  water  service  is  less  than  estimated  in  the 
previous  report,  the  estimated  amount  would  be  practically  made  up  by  the  amount 
of  service  rendered  by  the  private  water  companies. 

See  Table  No.  13  and  Remark  (1).     Table  No.  19. 

(b)      Under  Private  Ownership. 

TABLE  NO.  13 
(1)  ANNUAL  COST  OF  LOCAL  UTILITY  SERVICE 


-Annual  Cost  of  Service- 


Per  Total  for          Per  Per 

Kind  of  Service —                                                 Capita.  City  of  L.  A.  Family.*  Cent. 

Transportation,  Local   Street  Railway $16.20  $8,100,000  $81.00  32.30 

Telephone,  Local    13.04  6,518,964  65.19  25.99 

Electric,  Light  and  Power 12.52  6,258,000  62.58  24.95 

Gas:  Light,  Heat  and  Power 8.21  4,106,503  41.06  16.38 

Water  (About  13,460  Consumers  @  $7.08)  i 19  95,313  (35.40)  .38 

Total  $50.16     $25,078,782  100 

*A  family  unit  is  considered  as  made  up  of  five  persons. 

Remarks : 

iThe  per  capita  amount  of  $0.19  is  based  on  the  entire  city  population.  The 
amount  per  capita  for  those  actually  served  by  the  private  water  companies  is 
$7.08  or  $35.40  per  family.  These  consumers  also  pay  interest  and  sinking  fund 
taxes  on  the  aqueduct  bonds,  amounting  to  $3.64  per  capita  or  $18.20  per  family. 
Rates  and  taxes  together  give  $10.72  per  capita  and  $53.60  per  family, 

TABLE  NO.  14 
(2)     ANNUAL  COST  OF  INTERSTATE  UTILITY  SERVICE 


-Annual  Cost  of  Service- 


Total  for  the        Per     City  of  L.  A.  Per 

Kind  of  Service —                                       United  States.  Capita.     Portion.  Cent. 

Transportation,  Railwayi $3,500,000,000  $35.00     $17,500,000  91.96 

Transportation,  Expressz 206,108,092         2.06         1,030,540  5.41 

Telegraph  and  Long  Dist.  Telephones 100,000,000        1.00           500,000  2.63 

Total $3,806,108,092     $38.06     $19,030,540        100 

Remarks : 

lUnited  States  total  estimated  from  1914  report. 

2United  States  total  estimated  as  twice  the  combined  charges  for  transporta- 
tion, of  the  American  and  Wells-Fargo  Express  Companies. 

sComplete  or  exact  data  not  available.    Estimate  probably  too  small. 

(C)  PUBLIC  WORK  CARRIED  OUT  UNDER  PRIVATE  CONTRACT  DURING  1915 

TABLE  NO.  15 

Cost  of  Improvement 

Separate         Per  Per 

Kind   or   Class  of   Improvement—  Items.        Capita.        Total.      Cent. 

Street  Improvement, 

Vrooman  Act    $4,216,857 

Hammon  Act    187,834 

Harbor  Fund 68,896       $8.94       $4,473,597       66.69 

School  Buildings,  Equipment,  Etc. 

Buildings    1,150,571 

Equipment    215,653         2.73         1,366,224       20.37 

Harbor  Improvements*   l-'73  867,808      12.94 

Total $13.41       $6,707,629        100 

*In   addition  to  this  amount   $68,896   was  included   under  "Street   Improve- 
ments," making  a  total  of  $936,704  (for  Harbor  Contract  Work. 

[25] 


Summaries 


TABLE  NO.  16 

SUMMARY  OF  ANNUAL  COSTS  FOR  PUBLIC   SERVICE.  GROUPED  UNDER 
NON-REVENUE  AND  REVENUE  PRODUCING 

Annual  Cost  of  Service 


Class  of  Service                            Total  Service  Per  City 

Rendered  by —                                by  Groups.  Capita.  Portion. 

Non-Revenue  Producing 

City  and   School   District $      12,876,223  $24.79  $12,395,466 

County    8,791,446  12.56  6.282,000 

State    17,998.543  6.32  3,160.000 

United  States    780,803,435  7.81  3,905,000 

First  Sub-Total.. $    820,469,647  $51.48  $25,742,466 
Revenue  Producing 

City  Enterprises    4,315,661  8.62  4.315.661 

United  States  Postal  Service 313.364.667  3.13  1,565,000 

Privately  Owned.  Local  Service..        25.078.782  50.16  25,078.782 

Privately  Owned,  Interstate   ....   3.806,108,092  38.06  19,030,540 

Second  Sub-Total. $4,148,867,202  $99.97  $49,989,983 

Grand  Total 4,969.336,849  151.45  75.732,449 


Per  Cents  of 

Sub- 

Grand 

Total. 

Total. 

48.15 

16.37 

24.40 

8.29 

12.28 

4.17 

15.17 

5.16 

100         33.99 


8.63  5.70 

3.13  2.06 

50.17  33.12 

38.07  25.13 


100 


66.01 
100 


TABLE  NO.  17 

SUMMARY    OF    ANNUAL    COSTS    FOR    PUBLIC    SERVICE.    UNDER    PUBLIC 
AND    PRIVATE    OWNERSHIP    GROUPING 


-Annual  Cost  of  Service- 


Kind  of  Ownership;                      Total  Service  Per 

Service  Rendered  by —                 of  Group.  Capita. 

Publicly  Owned 

City  and   School   District $      17.191,884  $33.42 

County 8,791,446  12.56 

State    17.998,543  6.32 

United  States   1,094,168.102  10.94 


City 
Portion. 


$16,711,127 
6.282,000 
3,160.000 
5,470.000 


Per  Cents  of 
Sub-  Grand 
Total.  Total. 


52.84 
19.86 
10.00 
17.30 


22.07 
8.29 
4.17 
7.22 


First  Sub-Total.. $1,138,149,975     $63.24     $31,523,127        100         41.75 


Privately  Ovy^ned 

Local.   Utility   Service 25,078,782       50.16       25.078,782       56.85       33.12 

Interstate.    Utility    Service 3.806.108,092       38.06       19.030,540       43.15       25.13 

Second  Sub-Total. $3,831,186,874     $88.22     $44,109,322        100         58.25 
Grand   Total 4,969,336,849     151.46       75,732.449  100 

In  addition  to  the  above,  a  .substantial  amount  should  bo  Included  to  cover 
cost  of  water  transportation,  local  cartage,  warehouse  and  storage  charRCS,  etc. 
Figures  for  these  items  are.  however,  not  available. 

There  are  some  duplications  in  the  tabulated^ figures,  as  the  amount  for  "Inter- 
state Railway"  service  Includes  part  of  the  cost  shown  for  postal  and  express 
charges.  In  like  manner,  the  cost  of  other  service  Is  made  up  in  part  of  trans- 
portation charges.  The  amount  of  duplication  and  overlapping  is  probably  much 
less  in  the  aggregate  than  those  service  costs  which  can  not  be  shown. 

While  the  tabulation  figures  are  not  fully  exact  and  complete  or  up  to  date, 
they  will  nevertheless  serve  for  the  purposes  of  comparison. 

[26] 


Direct    Tax    Levy 
TABLE  NO.  18 

CITY    AND    COUNTY    DIRECT    TAX    LEVY,    1915 
Amount  of  Direct  Tax- 


Total  Per  City's              Per  Per 

Levy  for —                                Collected.  Capita.  Portion.  Family.  Cent. 

City     $6,753,715  $13.51  $6,753,715  $67.55  60.50 

County    6,175,835  8.82  4,410,000           44.10  39.50 

Total* $2_.33       $11,163,715       $111.65  100 

♦General  property  tax. 

It  is  perhaps  needless  to  further  consider  tabulation  detail  at  this  time,  and 
we  come  to  the  real  lesson  to  be  brought  out  and  presented  through  the  study. 


3RD.     INCENTIVES  FOR  POLITICAL  ACTIVITY  OP 

UTILITY  AND  CONTRACTING  CONCERNS;  NEED 

POR  EXTENSION  OP  PUBLIC  OWNERSHIP 

AND     CONDUCT     OP     PUBLIC 

SERVICE  UNDERTAiaNGS 

Some  Causes  for  the  Breakdown  of  Our  Municipal   Governments 

The  showing  made  in  the  United  States,  by  municipal  governments,  during 
the  century  and  a  quarter  of  our  independence,  has  on  the  whole  been  quite  dis- 
appointing. Inefficiency  and  graft,  with  the  domination  of  the  political  "boss," 
have  been  the  rule  rather  than  the  exception,  to  a  greater  or  less  degree  in  prac- 
tically all  of  our  cities.  Among  the  causes  or  influences  contributing  to  this  result 
may  be  mentioned: 

1st.  Forms  of  government  poorly  adopted  for  city  conditions  and  service, 
(divided  responsibility,  checks  and  balances,  short  terms  of  office,  etc.) ; 

2nd.  Nomination  and  election  of  city  officials  based  on  the  lines  and  policies 
of  national  party  politics; 

3rd.  Acceptance  and  use  by  the  municipalities  of  the  "spoils  system,"  which 
was  grafted  on  the  practice  of  our  national  parties; 

4th.  The  enormous  growth  and  extension  of  public  utility  enterprises  and 
undertakings,  and,  the  granting  and  trading  in  utility  franchises,  with  the  at- 
tendent  corruption  and  bribery; 

5th.     The  practice  of  letting  public  works  contracts  to  private  parties; 

6th.  Indifference  and  lack  of  interest  in  public  affairs  by  the  electors,  and 
an  absence  of  open-mindedness  to  discover  and  adopt  the  best  forms  or  methods 
of  government  suited  to  municipal  requirements,  already  proven  good  by  others. 

In  few  words,  our  municipalities  have  been  administered  too  much  in  the 
interests  of  personal  or  private  profit,  rather  than  in  disinterested  patriotic 
service  for  the  good  of  all. 

Franchises    and    Contracts 

This  part  of  the  report  will  attempt  to  deal  only  with  privately  owned  public 
utility  franchise,  and  public  works  contract  questions.  These  have  been  and  are 
now,  unquestionably,  among  the  most  potent  factors  in  the  production  of  corrupt 
and  inefficient  service  in  our  municipal  governments.  There  has  been  rarely  a 
notable  case  of  municipal  corruption  and   scandal   in  the  country,  that  has  not 

[27] 


had  back  of  and  involved  with  it,  In  a  more  or  less  direct  way,  franchise  grants 
or  public  works  contracts. 

The  notorious  Tammany  Hall  interests  in  New  York  City,  have  been  chiefly 
concerned  with  public  works  contracts,  but  trading  in  utility  franchises  has  been 
no  inconsiderable  part  of  their  interest  and  activity  in  the  municipality's  affairs. 

Lincoln  Steffens  in  "The  Shame  of  the  Cities"  gives  some  outstanding  features 
of  graft  and  corruption  of  various  kinds  in  the  different  American  cities. 

The  most  notable  case  in  this  country,  of  the  exposure  and  prosecution  of 
graft  and  corruption,  was  that  of  San  Francisco.  Years  of  absolute  domination 
and  corruption  in  the  State  of  California,  by  a  powerful  political  machine  for 
profit,  backed  by  the  Southern  Pacific  and  other  utility  interests,  reached  a  cul- 
mination in  1906,  directly  after  the  San  Francisco  earthquake  and  fire,  in  franchise 
trading  and  bribery,  together  with  extortion.  As  a  result,  the  mayor  was  con- 
victed and  sentenced  for  extortion;  sixteen  of  the  eighteen  supervisors  were  forced 
to  resign  for  confessed  bribe  taking;  the  then  San  Francisco  "boss,"  Abe  Ruef, 
was  sent  to  the  penitentiary.  (Every  citizen  of  the  country  should  read  and  re- 
read "  'The  System'  as  Uncovered  by  the  San  Francisco  Graft  Prosecution,"  by 
Franklin  Hichborn). 

The  national  government  has  not  been  free  from  exploitation,  as  witness  the 
railway  land-grant  frauds,  and  the  armor  plate  contract  scandals  of  some  years 
past. 

Money    Measure   of  Control    Influence 

The  tabulations  giving  the  value  of  property  and  the  annual  cost  of  public 
utility  service,  will  serve  to  show  in  a  measure  the  source  and  the  degree  of 
influence  and  pressure  of  the  "Invisible  Government"  or  "System"  on  our  public 
affairs. 

Table  No.  9  shows  that  out  of  the  total  of  $934.85  per  capita  value  of  property 
devoted  to  public  service,  $491.78  or  52.6%  is  privately  owned.  In  addition  $276.53 
or  29.6%  of  the  balance  is  subject  to  franchise  grant  for  carr>ing  on  privately 
owned  public  utility  service.  These  give  a  combined  total  of  $768.31  per  capita 
or  82.2%  of  the  total  public  service  rendering  property  subject  to  private  owner- 
ship, influence  and  control.  Again,  of  this  amount,  the  street  paving  represents 
$50.78  per  capita  or  5.43%  that  is  created  under  private  contract.  Other  "Contract 
Created"  property  brings  this  total  up  to  $87.29  per  capita  or  9.34%  contract  in- 
fluence. This  added  to  the  above  82.27o  gives  a  total  of  91.54%  as  the  private  in- 
terest influence,  in  owning,  controlling  or  creating  public  service  property. 

Table  No.  15  shows  that  for  1915,  in  the  city  and  school  district,  over  $6,700,000 
was  expended  under  private  contract. 

Table  No.  17  shows  that  out  of  a  total  of  151.46  dollars  per  capita  for  public 
service,  $88.22  or  58.25%  is  furnished  by  privately  owned  utility  concerns. 

The  per  capita  amount  of  value  of  $491.78  represents  a  total  investment  for 
the  city  service  of  $245,890,000.  It  is  needless  to  say  that  this  investment  is  made 
and  maintained  primarily  for  profit.  Public  works  contracts  are  also  undertaken 
for  gaining  profit. 

Incentives  for  Political  Activity,  by  Utility  Concerns  and  Contractora 

In  establishing  their  franchise  rights,  equipment,  and  in  rendering  service, 
the  public  utility  concerns  have  continually  to  go  to  the  city  government  to  get 
rights  and  privileges.  In  securing  contracts  and  carrying  them  into  execution,  the 
contractor  has  also  to  deal  with  the  city  officials.  Rights,  privileges  and  accom- 
modations can  usually  best  be  secured  by  having  at  least  part  of  the  governing 
authorities  friendly  to  those  who  seek  grants  and  privileges.  This  naturally  puts 
these  "Private"  interests  in  politics  to  secure  the  election  and  appoiniment  of 
oflicials  who  are  "friendly."  The  intermediary  to  accomi)lish  this  purpose  has 
generally  been  the  political  "boss."  There  are  other  successful  agencies  employed 
which  we  will  not  undertake  to  discuss  at  this  time. 

The  prizes  and  returns  to  be  secured  by  the  exploiter  are  so  great  that  few 
if  any  American  cities  have  escaped  this  blighting  influence  on  tlielr  government. 
The  situation  is,  and  has  been  such,  that  some  utility  concerns  that  would  have 
otherwise  refrained  from  dishonest  and  corrupt  politics  and  practices,  have  been 
forced  into  the  political  field  in  Belf-defense,  against  the  unscrupulous  methods  of 
their  competitors  and  opponents. 

[28] 


It  will  be  to  little  purpose  to  detail  further  at  this  time  the  pernicious  influ- 
ence on  government  exerted  through  the  political  activity  of  public  works  con- 
tractors, and  public  service  utility  concerns.  The  most  casual  observer  recognizes 
the  unsatisfactory,  and  in  many  cases  intolerable,  governing  of  American  cities. 
The  source  and  origin  of  the  "Invisible  Government"  or  "System,"  and  its  constant 
and  subtle  influence  is  not  recognized  or  appreicated  to  the  extent  that  it  should 
be,  by  the  great  majority  of  our  citizens.  Dishonest  and  ineflScient  municipal  gov- 
ernment is  of  such  long  standing  and  so  extensive,  that  well  qualified  self-respect- 
ing citizens  can  hardly  undertake  municipal  service,  without  feeling  that  in  so 
doing,  it  is  to  a  degree  at  a  sacrifice  to  their  self-respect.  In  fact  there  ^s  more 
than  a  suspicion  that  the  "Invisible  Government"  agencies  have  acted  with  a  delib- 
erate purpose  to  have  public  office  carry  a  degree  of  odium  and  stigma,  to  dis- 
courage well-qualified,  honest  and  self-respecting  men  from  accepting,  let  alone 
seeking  this  service. 

We  are  not  lacking  in  exposures  of  the  prostitution  of  government  to  serve 
selfish  interests.  We  have  many  appeals  to  our  civic  pride  to  rid  ourselves  of  the 
domination  of  these  interests  in  politics  and  government.  Many  appeals,  and  more 
or  less  effort  has  been  directed  toward  the  extension  of  public  ownership  of  service 
utility  undertakings,  as  an  aid  in  securing  relief. 

Notwithstanding  all  this,  our  progress  in  improving  and  securing  the  desired 
degree  of  honesty  and  efficiency  in  government,  is  discouragingly  slow. 

Dollars  and  Cents  Reasons  for  Extending  Government  Ownership 

Self-interest  is  one  of  the  strongest  and  most  potent  incentives  for  action, 
which  seldom  fails  to  meet  with  a  fair  degree  of  response,  but  seems  never  to 
have  been  adequately  presented  as  an  argument,  in  the  interests  of  all,  for  the 
extension  of  public  ownership.  What  will  the  extension  of  government  ownership 
of  public  service  utilities  mean  to  us  individually  in  the  full  measure  of  dollars 
and  cents? 

A  further  study  of  the  tabulations  will  disclose  some  of  the  most  convincing 
dollars  and  cents  reasons  why  we  should  extend  government  ownership  to  include 
all  public  service  utility  enterprises. 

Table  No.  9  shows  the  per  capita  investment  in  utility  enterprises  under 
private  ownership  to  be  $491.78.  Before  the  day  of  regulation  and  rate  fixing 
authorities,  rates  were  generally  made  as;  high  as  the  traffic  would  bear.  At 
present  a  return  of  eight  per  cent  on  the  investment  is  considered  fair.  Munici- 
palities can  generally  borrow  money  for  from  four  to  five  per  cent.  If  all  of  the 
public  utility  service  were  carried  on  as  public  enterprises,  without  profit,  and 
money  borrowed  at  four  and  one-half  per  cent,  then  the  annual  saving  from  this 
item  alone  would  amount  to  the  potential  difference  between  that  and  eight  per 
cent,  into  $491.78  or  $17.21  per  capita. 

Table  No.  15  shows  that  in  1915,  $13.41  per  capita  was  spent  for  contract 
work.  Contractor's  profits  are  generally  figured  at  twenty  per  cent.  If  this  work 
were  carried  out  by  the  municipality  at  cost,  this  per  cent  of  cost  amounting  to 
?2.68  per  capita,  could  generally  be  saved. 

The  two  items  above  amount  to  a  total  of  $19.89  per  capita  per  annum,  or  a 
gross  amount  of  $9,945,000  for  the  entire  city. 

Table  No.  17  shows  the  cost  of  utility  service  per  capita  rendered  by  private 
concerns  to  be  $88.22.  The  potential  saving  on  this  of  $17.21  leaves  $71.01  or 
a  reduction  of  19.49%.  This  total  potential  reduction  in  the  cost  of  utility  serv- 
ice for  the  whole  City  of  Los  Angeles  amounts  to  $8,605,000  per  annum. 

The  $8,605,000  annual  saving  represented  by  the  3i/^%  diflference  between 
"Return"  and  "Interest,"  is  not  the  only  money  saving  that  may  be  reasonably 
expected.  There  is  now  an  enormous  amount  of  duplication  and  over-lapping 
which  could  be  eliminated.  With  parcels  post  service,  is  there  any  good  reason 
why  the  country  should  be  served  in  addition  with  half  a  dozen  or  more  inde- 
pendent, privately  owned  express  companies?  Under  government  ownership  and 
operation  there  is  no  good  reason  why  the  telephone  and  telegraph  service  should 
not  be  combined  with  and  made  a  part  of  the  postal  system. 

In  interstate  railway  transportation  a  great  amount  of  duplication  of  prop- 
erty and  service  could  be  avoided  without  any  loss  in  efficiency,  and  probably 
with  an  actual  gain. 

It  is  hardly  necessary  to  mention  the  two  local  telephone  systems,  the  two 
local  transportation  systems,  the  two  telegraph  systems,  the  three  electric  sys- 
tems, the  three  or  more  gas  companies,  and  about  ten  private  water  companies. 

[29] 


It  is  a  fair  presumption  that  under  complete  government  ownership  of  all 
public  service  utilities,  that  through  the  reduction  of  over-head  expense  and 
needless  duplication  of  property  and  service  an  additional  saving  of  about  10% 
could  be  had  on  the  $44,109,322  annual  utility  service  cost,  conducted  under  private 
ownership,  amounting  to  $4,410,932.  This  combined  with  the  saving  of  $8,605,000 
on  "Fair  Return"  gives  a  total  of  $13,015,932,  or  $26.03  per  capita.  In  addition 
the  saving  of  $2.68  per  capita,  or  a  total  of  $1,340,000,  the  possible  saving  on 
contracts,  is  thrown  in  for  good  measure. 

It  will  be  of  interest  to  show  in  tabular  form  the  cost  of  all  kinds  of  serv- 
ice, under  per  capita,  per  family,  and  in  comparative  per  cents.     See  Table  No.  19. 

Many  complaints  are  heard  about  high  taxes.  Just  how  much  of  the  public 
service  is  paid  from:  direct  tax  levy;  fees  and  licenses;  internal  revenue;  duties; 
fares;  rates,  etc.,  would  be  interesting  to  show.  This  inforfation  is  apparently 
not  available,  without  a  great  deal  of  research,  if  at  all. 

Table  No.  16  shows  the  total  annual  cost  of  public  service  for  the  citizens  of 
Los  Angeles  to  be  $75,732,449.  Of  this  amount  $25,742,466  or  $33.99%  is  the  cost 
of  non-revenue  producing  service,  rendered  by  the  City,  County,  State  and  United 
States. 

The  Six  Largest  Items  of  Public  Service  Costs 

From  Table  No.  18  note  that  the  total  direct  tax  levy  amounts  to  $22.33  per 
capita.  Table  No.  19  shows  that  the  largest  single  item  of  expense  enumerated 
for  public  service  is  $35.00  per  capita  for  interstate  railway  transportation.  The 
smallest  is  for  county  public  health,  $0.01.  Total  for  city  and  county  public 
health  $1.58.  The  second  largest  item  is  for  local  transportation,  516.20.  The 
third,  local  telephone  service  $13.04.  The  fourth,  electric  service  $12.52.  Edu- 
cation comes  fifth,  at  $9.65.  The  sixth,  is  gas  at  $8.21.  Note  the  fact  that  these 
six  largest  items  of  expense,  except  the  fifth  for  education,  are  of  the  revenue 
producing  class  and  are  for  privately  owned  public  utility  service. 

Direct  Tax  and  "Saving"  Compared 

Table  No.  18  shows  the  total  direct  tax  levy  of  the  city  and  county  amounts 
to  $11,163,715.  It  is  equivalent  to  43.36  per  cent  of  the  cost  of  uon-revenue  pro- 
ducing service.  Of  the  total  public  rervice  cost  of  $75,732,449  per  annum  it  amounts 
to  14.74%.  Of  the  cost  of  service  rendered  under  public  ownership,  of  $31,623,127, 
the  direct  tax  levy  as  above  represents  35.30  per  cent. 

Compare  now  the  potential  saving  on,  "Fair  Return"  of  $8,605,000,  "Overhead, 
Etc."  $4,410,932;  total  $13,015,932  per  annum,  with  the  cost  of  different  kinds  of 
public  service,  under  public  and  private  ownership,  and  the  direct  tax  levy. 

Description  of  Figure  1 

Figure  1  shows  the  "Grand  Total"  per  cents  for  the  different  items  of  Table 
No.  19  drawn  to  scale.  The  solid  black  bars  represent  to  scale  the  figures  set 
opposite.  The  first  bar  column  represents  kind  of  ownership;  the  second,  repre- 
sents kind  of  service;  the  third,  represents  the  detail  of  the  kind  of  service;  the 
fourth,  represents  revenue  and  non-revenue  service;  the  fifth,  source  of  revenue 
or  how  the  service  cost  Is  paid;  and  sixth,  the  total  per  capita  cost  per  annum. 
The  per  cent  that  each  item  is  of  the  whole  is  given  In  figures  In  each  case  and 
where  practicable  the  per  capita  cost  in  dollars  and  criits  as  well.  The  division 
line  between  i)rivate  and  jjiiblic  ownership  extends  across  bars  1.  2  and  3.  while 
that  between  revenue  and  non -revenue  producing  extends  across  bars  3,  2  and  5. 

[30] 


TABLE  NO.  19 


APPROXIMATE  ANNUAL  COST  FOR  DIFFERENT  KINDS  OF  PUBLIC  SERV- 
ICE, PER  CAPITA,  PER  FAMILY,  AND  IN  COMPARATIVE  PER  CENTS 


Annual  Cost  of  Service 

Per  Cent  of 

Per         Per        Sub      Grand 

Capita.  Family.Tot'l  % .  Tot'l  % 


$  3.00 
3.77 
1.57 
4.16 
9.65 
.71 
1.19 
.74 


15.00 

18.85 

7.85 

20.80 

48.25 

3.55 

5.95 

3.70 


12.10 

15.19 

6.32 

16.78 

38.92 

2.87 

4.82 

3.00 


Non- Revenue   Producing — 

Cost  of 
Kind   of   Service,   Rendered   by  Service 

Paid  by. 

City — General  City  Government 1-2-3- 

Public  Safety   

Public  Health   

Highways   

Education  

Recreation 

Charities 

General  and  Miscellaneous 

Total  City -1-2-3- 

County — General  Government  1-2-3- 

Public  Safety  

Public  Health 

Highways 

Recreation 

Charities    

Miscellaneous 

Interest  and  Debt  Redem 

Objects  of  Trust 

Investments  Purchased 

Total  for  County 1-2-3- 

State  Total 1-2-3- 

United  States— Total   1-2-3-7-8 


Total— Non-Revenue    Producing  ..  .1-2-3-7-8-       51.48       257.40        100 


Revenue  Producing — 

City — Water,  Service 4- 

Int.  &  Redemption    1- 

Electric,  Int.  &  Redemption 1- 

Harbor,  Service 3-5- 

Int.  &  Redemption 1- 

Total  City 1-3-4-5 

United    States — Postal    Service 4-7-8- 

Total— Public  Ownership 1-3-4-5-7 

Private  Ownership 

Transportation,  Street  Ry 6-5- 

Transportation,  Interstate 4-6-5- 

Transportation,  Express 4- 

Communication,  Telephone    4- 

Communication,  Telgr.  &  L.  Dis.Tel.4- 

Light  &  Power,  Electric  4- 

Light  &  Power,  Gas 4- 

§  Water  4- 

Total — Private  Ownership    ....  4-5-6- 

Total — Revenue  Producing 1-3-4-5-6 


3.49 

3.64 

.64 

.12 

.73 

8.62 

3.13 


17.45 
18.20 

3.20 
.60 

3.65 


40.50 

42.18 

7.40 

1.40 

8.52 


43.10        100 

t73.36 
15.65     t26.64 


-8-  11.75 

16.20 

35.00 
2.06 

13.04 
1.00 

12.56 

8.21 

.19 


58.75 

81.00 

175.00 

10.30 

65.20 

5.00 

62.58 

41.06 

.95 


GRAND  TOTAL— Non-Rev.  &  Revenue 


88.22   441.09    100 
t88.25 
99.97   499.84    100 

$151.45  $757.25 


1.98 

2.49 

1.03 

2.75 

6.37 

.47 

.79 

.49 


24.79 

123.95 

100 
*48.15 

16.37 

2.31 

11.55 

18.36 

1.53 

.55 

2.75 

4.34 

.36 

.01 

.05 

.08 

.01 

3.20 

16.00 

25.51 

2.12 

.17 

.85 

1.36 

.11 

1.70 

8.50 

13.56 

1.12 

.89 

4.45 

7.07 

.59 

1.57 

7.85 

12.48 

1.04 

.52 

2.60 

4.17 

.34 

1.64 

8.20 

13.07 
100 

1.08 

12.56 

62.80 

8.29 

*24.40 

6.32 

31.60 

*12.28 

4.17 

7.81 

39.05 

*15.17 

5.16 

33.99 


58.24 
66.01 
100 


[31] 


c/rr  5ERV/CL 

&    SCHOOLS 

/6.37  % 


O/^  L.   GOy.     /J90  % 


COU/^TY 
0.  29  % 


STATS  SCf^V. 

4-17  7o    $6>JZ 


a.  S  S£RVIC£\ 
S./6  % 
,0  7.0/ 

c/ry  sERV. 
s.  70  ro 


U.  S.  .SCFfVICC 
Z..0  6V..    £3./3 


h4 


ti 

^ 

I 


TRANPOR" 
TAT  ION 

SERVICE 


COri/^UNfCA 
T/O/y  5ERVIC 

9.27  r- 

;^ /4. OW- 
LISH T  AA/O 
ROWER 
a£RV/C£ 

/3. 6a  % 

^10 2^.77 


PB.    a/iF£TY      Z.4S7. 


H£/tL  TV/ 


/.03  % 


/^/&//v\^A  ys      B  7-^  7o 


£100  CAT/ ON 

6.37%     ^s6s 

FfECffCA T/o/¥    .^  7  % 
C/fAff/  TtC  5        O  7^  % 


M/SCEL. 


FrFCFf£.fi 


Mt^S^AlB. 


^rw 


r^/sc&LL 


7?  /^qy; 


n;.,  ^A^;?r^^^^^T..  4. 


A04  y» 


//VV£ST. 


/OQ  r. 


TOTAL 


TOTAL 


WAT£R       4.7/% 
£_L£C  TRI C    O.'^'^o 

RosTAL       a. 06  % 


LOCAL    STRLET 
RA/LWAY 

/o.  70  % 

^/6.ZO 


/NTSRSTATE 
/RAJLWAY 

23.  II  Ya 
^3S.OO 


WAT/TR 


£;(PH£SS     /.S6%    St, OS 
LOCAL    T£LERHO/i€ 

a.&j  %     ,^/3.o^ 

TLLC^RAf//  A  LO/i& 
O/ST.   T£L£RNONL 

0.6G%      fi/.OO 

CLELCTR/C 
e.26%      j^/2.S6 


GA3 
SAZ  % 

yVATJUf^ 


j^G.2/ 


N 


^ 


^ 


^\ 


K 


\l 


I 

o 

It 


1 


(Reference  Notes  for  Table  No.  19.) 

NOTE — Index  for  "Cost  of  Service  Paid  by":  1-  Tax  Levy;  2-  Licenses; 
3-  Fees;  4-  Rates;  5-  Rentals;  6-  Fares;  7-  Duties;  8-  Internal  Revenue. 

REMARKS — ♦,  t,  t,  are  group  total  per  cents.  §  This  added  to  amount  for 
water  in  Table  12  gives  total  a  little  less  than  in  the  original  report. 


TABLE  NO.  20 

ANNUAL  COST  OF  DIFFERENT  KINDS  OP  PUBLIC  SERVICE,  AND  THE  PER 

CENTS    OF   EACH   WHICH    THE    PROBABLE   SAVING   FROM    "FAIR 

RETURN"    RATE    ON    PROPERTY,   AND   A   REDUCTION    OF 

OVERHEAD  EXPENSE,  DUPLICATION  OF  SERVICE, 

ETC.,  WOULD  PROBABLY  AMOUNT  TO 

Annual  Saving  and   Their   Per 

Cents    of    Service    Costs,    Etc. 

"Fair  Return"  "Service"        Total 

Per    Capita 

—Cost  of  Service—        $17.21  $8.82  $26.03 

Ownership,  Kind  of  Service,  Per       Total 

or  Revenue  Origin—  Total.  Capita.  $8,605,000  $4,410,932  $13,015,932 

Percent.  Per  Cent.  Per  Cent. 

Total  Public  Service $75,732,449         $151.46  11.36  5.82  17.18 

Publicly  Owned  Service 31,623,127  63.24  27.21  13.95  41.16 

Privately  Owned  Service...   44,109,322  88.22  19.51  10.00  29.51 

Non-Revenue  Producing 

Service     25,742,266  51.48  33.43  17.13  50.56 

Revenue    Producing    Service  49,989,983  99.97  17.21  8.82  26.03 

Tax  Levy,  Total,  Direct 11,163,715  22.33  77.08  39.51  116.59 

Tax  Levy,  City,  Direct 6,753,715  13.51  127.41  65.30  192.71 

Tax  Levy,  County,  Direct* . .     4,410,000  8.82  195.12  100.02  295.14 

*City's  portion  of  County  Direct  Levy.  The  cost  of  the  non-revenue  producing 
service  paid  out  of;  direct  tax  levy;  fees;  licenses;  internal  revenue;  duties;  etc. 

A  reference  to  Table  No.  20  shows  the  potential  saving  between  "Fair  Return" 
and  "City  Bond  Interest"  on  the  investment  per  capita,  of  the  privately  owned 
public  service  utility  concerns,  is  almost  twenty  (19.51)  per  cent  of  the  annual 
cost  of  the  service  rendered  by  these  agencies.  It  is  of  particular  significance 
that  this  saving  is  over  three-quarters  (77.08%)  the  amount  of  the  total  direct  tax 
levy.  It  is  over  one  and  one-quarter  times  (127.41%)  the  total  city  tax  levy  and 
almost  twice  (195.12%)  the  amount  of  the  city  share  of  the  county  direct  tax  levy. 

Compare  these  items  of  service  costs  with  the  direct  tax  levy  per  capita,  in 
per  cents  of  $22.33: 


$35.00  for  interstate  railway  service is  156.74  per  cent  of  $22.33 

$16.20  for  local  street  railway  service is     72.55  per  cent  of  $22.33 

$13.04  for  local  telephone  service is     58.39  per  cent  of  $22.33 

$12.52  for  electric  service is     56.07  per  cent  of  $22.33 

$  9.65  for  education  is     43.22  per  cent  of  $22.33 

$  8.21  for  gas  service is     36.77  per  cent  of  $22.33 

The  objection  may  be  raised  that  the  suggested  annual  saving  of  over  eight 
million  and  a  half  dollars  is  based  on  interstate  service  cost  as  well  as  local;  and 
that  the  taking  over  of  the  railways  by  the  general  government  is  too  remote  to 
consider  as  a  practical  move  at  this  time.  To  such  an  objection  it  may  be  an- 
swered that  if  the  efforts  toward  government  ownership  were  confined  to  local 
service  utilities,  now  in  private  hands,  the  following  showing  should  be  made. 
Tables  Nos.  8  and  9  show  that  the  value  of  property  devoted  to  local  utility  service 
is  $140,427,000  or  $280.85  per  capita.  This  amounts  to  57.11  per  cent  of  the  City's 
total  share  of  utility  service  property,  privately  owned.  It  will  thus  be  seen  that 
considerably  more  than  half  the  amounts   previously  given  would  apply   if  the 

[33] 


local  utilities  alone  were  considered.  To  be  specific,  three  and  one-half  per  cent 
of  $280.85  amounts  to  $9.82,  as  the  annual  saving  per  capita.  This  total  for  the 
city  ($4,910,000)  added  to  ten  per  cent  of  local  utility  service  cost  ($25,078,782  x 
109^)  $2,507,878,  gives  a  total  saving  of  $7,422,878.  This  amounts  to  more  than 
half  the  estimated  possible  annual  saving,  before  mentioned,  of  $13,015,932. 

What  the  Potential  Saving  Would  Buy 

The  matter  may  very  well  be  put  in  another  way.  If  the  people  of  Los  Angeles 
were  able  to  save  this  larger  amount  ($13,015,932)  every  year,  some  of  the  follow- 
ing results  might  be  accomplished: 

One  year's  saving  ($13,015,932)  would  nearly  pay  for  the  estimated  value  of 
the  Los  Angeles  Gas  and  Electric  Corporation  property  (Table  No.  5,  $14,000,000). 
The  same  estimate  also  applies  to  the  two  telephone  companies.  It  would  more 
than  two-thirds  pay  the  estimated  value  of  the  entire  property  of  the  Southern 
California  Edison  Company,  $19,000,000. 

Two  years'  saving  ($26,031,864)  would  more  than  cover  the  estimated  value  or 
bonded  debt  ($23,500,000)  of  the  Los  Angeles  Railway  Corporation.  It  falls  only 
$2,967,136  short  of  the  estimated  value  of  the  property  of  the  Pacific  Light  & 
Power  Corporation. 

Eleven  years'  savings  (^143,175,252)  would  more  than  pay  for  the  entire  esti- 
mated value  of  all  local  utility  service  property  now  under  private  ownership 
($140,427,000)  devoted  to  the  service  of  the  people  of  Los  Angeles. 

On  the  face  of  this  showing  alone,  we  have  no  hesitancy  in  making  the  un- 
qualified assertion  that  all  utility  service  that  depends  on  franchise  grants,  or  is 
in  its  nature  a  monopoly,  should  be  owned  and  operated  as  a  government  enter- 
prise. 

Mora!  Worth  of  Government  Ownership 

As  previously  stated  we  have  not  lacked  for  sensational  exposures  of  corrup- 
tion and  graft  in  franchise  trading,  and  steals,  as  well  as  in  public  works  contract 
scandals.  As  an  additional  and  attendant  evil  of  private  ownership,  stock  jobbing 
and  gambling,  are  of  serious  importance. 

We  may  be  indifferent  to'  corruption  and  scandal,  but  if  the  oft-repeated 
complaint  about  high  taxes  is  any  criterion  of  interest,  then  the  question  of  pub- 
lic ownership,  as  affecting  us  by  self-interest  in  dollars  and  cents,  should  be  of 
compelling  vital  interest  and  importance  to  any  person,  paying  utility  service  rates, 
either  directly  or  indirectly,  if  the  figures  above  presented  are  worthy  of  confi- 
dence, which  we  believe  they  are. 

Where  we  have  established  a  community  interest  in  service,  such  as  schools, 
postal  service,  conservation  of  health,  fire  protection,  policing,  water  service,  etc.. 
there  is  never  a  question  raised,  as  to  the  propriety  or  desirability  of  their  conduct 
as  public  enterprises.  The  question  therefore  naturally  arrives  as  to  why  we  should 
hesitate  or  be  timid  about  the  complete  extension  of  government  ownership  to 
cover  all  public  utility  service? 

There  is  perhaps  nothing  that  will  conduce  to  the  upbuilding,  well-being  and 
advancement  of  a  community  so  much  as  the  widespread  and  unselfish  Interest  of 
all  of  the  citizens,  in  the  things  essential  or  desirable  for  the  good  of  all.  Any 
conditions  or  agencies  that  stand  in  the  way  of  this  attainment  aliould  be  removed. 

Corrupting  influence  of  "Private  Interest" 

The  "Invisible  Government"  or  "System"  is  not  a  mytli,  belonging  only  to 
other  times  and  places.  Do  not  forget  for  a  moment  that  this  influence  is  always 
present  and  potently  active.  No  better  evidence  of  this  need  be  slunvn  than  is 
given  in  the  words  of  Franklin  Hlchborn  in  "The  System,"  wlilch  wo  take  the 
liberty  of  copying. 

"Tiio  great  Han  Francisco  fire  was  brought  under  control  Friday,  April  20.  1906. 
The  Sunday  following,  the  first  step  was  taken  toward  getting  the  scattered  Hoard 
of  Supervisors  together.  .  .  The  aK.hes  of  the  burned  city  were  still  hot;  tlie 
average  citizen  was  thinking  only  of  the  next  meal  and  shelter  for  tlu^  night  for 
himself  and  dependents.  Hut  the  public-service  corporations  wore  even  then  active 
in  furthering  plans  which  had  been  temporarily  dropped  while  San  Francisco  was 
burning. 

[34] 


Thursday,   August   3,    1916. 


CALIFORNIA     mSKPBNDBMT 


TALENTS  IN  THE  PULPIT 
There  is  an  idea  abroad  in  the 
church  that,  for  purposes  of  religious 
results,  feeble  instromentails  are  as  ef- 
6cicrtt  as  more  puissant  ones — fully  as 
efficient;  that  while  in  other  matters 
there  is  a  direct  ratio  between  human 
ability  and  accruing  affects,  in  the 
range  of  Christian  effort  the  /atio  be- 
tween the  two  is  an  invtrse  one,  and 
that  the  more  hoplcss  the  instrument 
God  uses  for  thVpromotion  of  Chris- 
tian interest  the  more  God  thinks  of 
.it,  and  the  more  abundantly  he  will 
bless  it.  In  olden  times  certainly  there 
■was  no  divine  prefferencc  for  human 
dbility  when  is  was  a  matter  of 
ministering  at  the  altar,  and  it  is  not 
clear  that  God's  choice  distinct  LeV- 
itical  requirement  that  no  man  with 
a  blemish  should  come  nigh  the  altar 
to  offer  the  offering  of  the  Lord.  That 
evinces  God's  purpose  that  no  man 
should  have  charge  of  sanctuary  ser- 
vice who  was  physically  deficient;  and 
the  inference  is  easy  not  to  say  neces- 
sary, that  he  wotild  regard  with  reluc- 
tance the  intrusion  into  sanctuary  of- 
fice's of  a  man  otherwise  deficient. 
Still  the  notion  has  ?^mehow  become 
diffused  that  pretty  much  anything 
will  answer  when  it  is  a  question  of 
Tnaking  a  minister.  Not  long  ago  I 
was  called  upon  by  a  lady  of  consid- 
erable Christian  eminence  who,  in  the 
course  of  conversation  regstrding  her 
household,  told  me  that 
thfeff  sons — John  James  and  William. 
In.  regard  to  John  she  said  that  she 
had  devoted  hint  to  law.  Jame*,  she 
said,  early  developed  greft  talents  of 
a  monetary  kind — shrewdness,  clever- 
ness and  the  like-^and  she  put  him  to 
Business.  The  third  son,  William,  she 
remarked,  in  an  apologetic  kind  of 
way,  she  had  consecrated  td  the  Lord, 
intending  me  to  understand  that  he 
had  been  set  apart  for  th  Christian 
ministry.  A  little  later  in  the  course  of 
conversation,  after  her  characteriza- 
tion of  her  three  sons  had  passed  out 
of  her  mind,  she  remarked,  casually, 
that  William  had  always  been  a  pip- 
ping sort  of  child,  and  she  never  had 


ness  for  a  bank  presiddncy.  The  great- 
est man  that  ever  lived  was  minister. ' 
The  pulpit  will  reach     in     rts     effects  I 
just   according   to   the   power — conse- 
crated power,  of  course — of  the  man 
that  occupies  the  pulpit.  God  usos  his  ' 
men  for  all  they  are  worth;  He  can- 
not use  them  for  any  more;   He  will  1 
not  use   them   for  any  less.  The  only 
profession  or  pursnit  of  which  it  can  1 
be  said  ihat  its  field  is  the  w.orld  is  the 
Christian  ministry.  , 

—Dr.  Charles  H.  Parkhurst 


D.  M.  Reynolds, 

Spl.  Agt.  President 
Pacific  Electric. 
PROTECTION  FOR  GRADE 
CROSSINGS 

"Thank-you-marni's"  to  protect  fail- 
way  grade  crossings  are  now  a  reality, 
for  Fulton  Lane,  President  of  the  Los| 
Angeles  Board  of  Public  Utilities,  and, 
the  man  whose  appointment  to  fill 
the  next  vacancy  on  the  State  Rail- 
road Commission  is  being  urged  in  _ 
Southern  California,  is  now  leading 
the  grade  crossing  protection  move- 
ment  in  Los  Angeles"  County,  in  an  : 
effort  to  cut  down  the  4900  grade ^ 
deaths-  reported  each  year  to  the 
Interstate  Commerce  Commiss^bn.       I 

In  ^n,  effort  to  co-operate  with  the  J 
State  Rfiilroad  Commission  in  the  pio-j 
tection  of  dangerous  crossings.  Lane . 
she  had  |4,as  instructed  the  Board  of  Public  | 
■^orks  of  "Los  Angeles  to  place  aj 
"thank  y^iu  marm"  at  the  crossing' 
of  the  Pacific  Electric  fcftir  track  line  | 
and  Mission  Road  on  the  busiest, 
boulevard  between  Los  Angeles  and. 
Pasadena.  ] 

A  bump  will  be  construced  fifty 
feet-on  each  side  of  the  railway, 
tracks  to  force  automobiles  to  slow  j 
down  to  8  miles  an  hour  in  running 
over  this  dangerous  crossing.  I 

The  construction  of  a  series  of 
checks  on  each  side  of  railway  cross- 
ings to  protect  speeders  against 
themselves,  has  been  advocated  both 
by  members  and  engineers  of  the 
State    Railroad    Commission    and    of 


force  automobilists  to  go  into  the  in- 
termediate gear. 

Lane,  who  was  one  of  the  builders 
of  the  Los  Angeles  aqueduct,  and 
who  has  just  completed  (or  the  City 
of  Los  Angeles  the  presentation  of 
the  most  important  rite  cast  ever 
heard  before  the  Railroad  Commis- 
sion, said-  in  his  letter  of  instructions 
to  the  Board  of  Public  Works,  "Ihe 
Pacific  Electric  has  four  tracks 
crossing  Missioii^Roard  at  Rose  Hill 
at  an  oblique  angle.  Many  obstruc- 
tions to  a  clear  view  of  the  tracks 
have  been  removed.  Warning  bells 
and  wig-wags  have  been  installed. 
Still  this  remains  a  very  dangerous 
crossing,  and  a  menace  to  life  hardly  i 
equalled  in  the  City,  on  account  of 
the  sharp  angle  and  the  careless  dis- ' 
regard  of  of  automobile  drivers  to 
the  warning  signals.  i 

"The  more  accustomed  aufomobilej 
drivers  become  to  this  crossing,  thej 
more  careless  they  are  to  its  warn- 
ing signals,  and  the  more  chances 
they  take  in  attempting  to  beat  the 
trains  to  and  across  this  grde  cross- 
ing. 

"Many  Cities  and  Counties  have  put 
in  checks.  Such  as  dips  and  bumps  to 
stop  speeding,  and  only  recently  this 
County  issued  a  permit  to  an  indi- 
vidual ow)ier  t|Ci  put  such  check  in 
front  of  his  property-  on  one  of  the 
County  boulevards. 

"This  method  seems  to  have  proved 
a  successful  method  of  putting  a 
check  to  speeders.  1  believe  it  would 
make  for  greater-safety  at  railroad 
crossings.  Checks  ton  Mission  Road 
would  have  to  be  located  some  fifty 
feet  from  the  railroad  right-of-way, 
and  in  the  stree  tover  which  your 
Board  has  jurdiction.  Such  checks, 
on  both  sides  of  this  crossing,  would 
be  a  comparatively  inexpensive  ex- 
periment, and  one  that  merits  a  fair 
trial." 


BREVITIES. 


much  expectation  of    being    able    to    fcjals  of    the    Automobile     Club    of 


raise  him. 

•Wholeness   is     in"    sense     holiness. 
Completeness  is  first  cousin  to  conse- 


Southern  California.  Until  this  time,] 
however,  no  public  official  has  taken 
definite  action  to  try  out  this  method 
cration;  and  whn  it  is  a  matter  of  q(  crossing  protection, 
choosing  men  to  be  ministers,  God's  Some  days  ago  S.  A.  Bishop,  gen- 
appeal  is,  first  of  all,  to  them  that  are  ^f^\  daim  agent  of  the  Pacific  Elec- 
pure  in  heart  not  only,  but  to  tfiem  ,^1^  addressed  a  letter  to  the  State  I 
that  are  stanch  in  body  and  gifted  in  Railroad  Commission  and  to  the 
mind;  in  other  words,  human  Board  of  Public  Utilities,  suggesting 
thoroughbreds.  that     an     experiment  along  this  line 

There  is  no  ministerial  arrogance  in    {,£  tried,  and  Lane,  in  order  to  try  out 
this.   It  is  a  frank   statement  of  fact,    ^^^g  proposed  plan  at  once,  decided  on 
and   fact,   too,   in   the   light   of  which    ,[,£  most  dangerous  crossing     in     the 
we  need  tothink  and  act  in  all  matters    Q\xy  of  Los  Angeles  ftor  the  test, 
relative  to  th  enriching  and  strength-        According     to    the     plan     outlined, 
ening  of  the   Christian   ministry.       If    speed  data  will  be  taken  at  this  cross- 
you  want  to  make,  a  man  president  of    {„g  before  the  bump  is  installed,  and 
a  bnk,  you  will  insist  that  he  be  hon-    additional  investigating  willi   be  made 
est;  but  that  will  go  very  little  way  in    after  the  work  is  done,  in  order  to  de- 
your  esteee.n  toward  making  out  his    termine   the   value   of  the   innovation, 
competency  for  th  position.  Goodness        Several  construction     methods     are 
goes  abuot  as    short    a    way    toward    suggested,  either  the   construction   of  j 
composing  fitnes?  for  the  ministry  as    a  bSimp  or  a  dip  in   the  road  or   the , 
honesty  does*  toward     composing  fit-,  building^  of  a   sand   pit   which    would 


Many  a  man  who  thinks  himself  a 
modern  big  gun  is  only  an  old  smooth 
bore. 

*  *  • 

It  is  "the  hQjror  of  home"  which  is 
driving  so  many  people  into  clubs  and 
hotels? 

*  •  • 

Where  a  busy  man  is  tempted  by 
one  devil  the  loafer  is  tempted  by  a 
dozen.     Get  busy. 

*  *  * 

It  is  getting  harder  every  day  for  a 
man  to  succeed  in  any  calling  and  yet 
be  a  drinker. 

*  ♦  « 
Letter-writing  preachers  are  seldom 

promoted,  and  .yet  they     never    learn 
the  reason  why. 

*  '«  * 

You  can  get  along  better  with  some 
nervous  people  by  just  letting  them 
pleasantly  alone. 

*  *  • 

Faithful  are  the  wounds  of  a  friend, 
but  don't  sharpen  your  tongue  just  to 
give  point  to  an  adage. 


WISE  OR 

Sasie's 
Our  Susie  keeps  i 

Just  like  a  regul 
She  waves  it  wh» 

And  marks  it  ^: 
She    m^jnches    De 
game, 

She  stretches  1 
And  cheers  the  r 
■    With  proud '. 

Sometimes  she's 

She  tally's  in 
And  jumps  wK 

And  starts 
Sse  dances  wt 

And  tremblej 
And  often  shar 

You'll  hear  I 

She  writes  golt 

And  claps  the 
She  hisses  at'th. 

\^^en  he  coun 
She  questionma 

But  underline 
In  ciphers  tha^ 

She  indicatei 

Oh,  show  me 

Upon  the  p> 
Or  ancient  tabi 

Sue  has  them 
Tell  me  hot  of 

Or  mystic  C 
They're  easy 

When  Sist. 
— K 


At  the  verj 
that  their 
ter  is  wholesc- 

Gov.  Han* 
Metodist  Epis 
ger  merely  n; 
a  world  churc 
where. 

When  a  man 
gion  which  mak, 
body  else  is  bac' 
ter  ask  himself  ; 
drinks. 

Now  that  in. 
ebb,  Americanis 
(ide.  Let  us  h: 
spirit  of  '76.  / 
all  the  time. 

You  think  '•' 
would  do  so 
are  that  you 
you  can  with 
ably  accomp 

Preachers  m. 
in  the  right  sen 
should,  not  be 
the  limited  e> 
dently  partis; 
party  wrongs 

The  only  gei 
cessfully  count 


FU 


".  .  .  The  people  forgot  for  the  time  the  issues  which  had  before  the  dis- 
aster divided  the  city.  But  the  agents  for  the  public-service  corporations  did  not 
forget.  We  find  a  representative  of  the  Home  Telephone  Company  picking  his 
way  over  the  hot  ashes  of  the  burned  city  to  (Supervisor)  McGushin's  saloon  to 
meet  the  Supervisors  that  the  interests  of  his  company  might  be  preserved,  .  .  . 
Even  as  the  Home  Company  was  seeking  out  the  Supervisors,  the  United  Railroads 
was  getting  in  touch  with  Ruef." 

While  the  incompetency,  corruption  and  graft  in  San  Francisco  was  no  worse 
than  has  been  and  is  experienced  by  other  cities,  the  "exposures"  have  been  more 
sensational  and  complete;  and  more  court  convictions  secured  than  in  any  others 
undertaken  in  the  country.  Included  in  the  convictions  were  city  officials,  bribe 
takers  and  bribe  givers.  Even  so,  the  convictions  fell  short  of  the  full  measure 
of  justice,  which,  however,  was  through,  no  fault  of  those  who  conducted  the  orig- 
inal prosecution. 

Does  anyone  for  a  moment  imagine  that  these  same  corrupting  influences  are 
not  at  work  in  the  city  of  Los  Angeles? 

Publicity  and  the  Prostitution  of  the  Press 

The  greatest  weapon  against  this  selfish  influence  is  full  and  truthful  pub- 
licity. On  the  other  hand  the  most  insidious  and  ingratiating  influence  of  the 
"System"  is  accomplished  through  "controlled"  publicity.  Consequently  the  "Sys- 
tem" is  "in"  the  publishing  business  and  has  established,  and  maintains  all  but 
complete  control  over  newspaper  publicity.  As  a  fair  example  of  publicity  appar- 
ently  15acEed~by  'Inspiration,"  note  Fig.  2,  which  is  a  photograph  of  an  article  ap- 
pearing in  the  California  Independent  of  August  3,  1916.  It  is  a  fair  presumption 
that  it  was  not  the  intention  to  have  the  "letter  head"  appear  as  copy,  as  we  are 
reliably  informed  that  after  the  discovery  was  made  that  a  "slip"  had  occurred,  the 
issue  was  suppressed.  As  to  what  degree  of  friendliness  is  entertained  by  the 
"Special  Agent  of  the  President  of  the  Pacific  Electric"  and  other  corporation 
friends  toward  the  other  members  of  the  Board,  of  which  the  gentleman  referred 
to  in  the  article  is  a  member,  we  are  not  in  possession  of  "published  information" 
to  state.    Note  lines  3  to  8  inclusive  under  "Protection  for  Grade  Crossings,"  Fig.  2. 

Our  "Friends"  the  Special  Agents  and  Their  "Friendship" 

We  need  not  flatter  ourselves  with  the  assertion  or  belief  that  there  are  not 
other  officials,  both  elective  and  appointive,  that  are  well  liked,  by  the  "Special 
Agents"  of  the  utility  interests. 

Mr.  Abraham  Ruef  was  paid  for  his  "services"  as  an  "attorney."  "There  are 
other  ways  of  killing  a  dog  than  choking  him  to  death  with  butter."  Sometimes 
officials  are  given  a  "friendly  tip"  on  how  to  invest  profitably  in  stocks.  Some- 
times officials  are  entrusted  with  the  right  to  secure  "options"  on  property  desired 
by  and  useful  to  public  service  corporations  or  their  friends.  Sometimes  public 
officials  are  given  an  opportunity  to  "earn"  commissions  on  services  rendered. 
There  are  many  ways  in  which  "Special  Agents"  can  render  themselves  agreeable 
and  prove  their  qualifications  as  "good  fellows." 

Evidence  is  not  lacking  to  show  that  the  public  works  contractors  Insist  on 
showing  their  "friendship"  to  public  officials  and  employes  in  many  different  ways. 

On  the  other  hand  when  public  officials  or  employes  are  not  responsive  to  the 
"friendship"  of  the  invisible  government  or  system,  they  are  generally  given 
to  understand  and  feel  that  they  "do  not  belong." 


[36] 


CONCLUSION 

Distinct  Gains  from  Government  Ownersliip 

We  are  definitely  of  the  opinion  that  the  complete  ownership  and  operation 
of  all  public  utility  service  undertakings  by  the  government  should  result  in  the 
following: 

1st.  Lowering  the  cost  of  service,  equivalent  to  over  seventeen  per  cent  of 
the  entire  public  service  cost,  or  to  nearly  thirty  per  cent  of  the  cost  of  service 
rendered  under  present  private  ownership.  Again  this  saving  should  amount  to 
more  than  the  entire  direct  tax  levy  (116.5%)  at  the  present  time; 

2nd.  Better  service,  through  the  elimination  of  duplicated  property  and 
service. 

3rd.  The  removal  from  the  political  field,  all  of  the  activity  and  pressure  now 
exerted  through  interest  in,  property  owned  and  service  rendered,  by  private  own- 
ership for  profit,  which  has  been  and  is  responsible  for  such  a  large  part  of  the 
corruption  and  graft  in  the  conduct  of  government; 

4th.  The  united  sentiment  and  support  of  the  major  portion  of  the  citizens 
of  the  community,  in  an  insistent  demand  for  efficient  and  honest  service  by  public 
officials  and  employes,  in  the  interest  of  the  general  good,  instead  as  now  too  often 
happens,  in  the  interest  of  special  privilege. 

5th.  The  relief  of  the  press  from  the  pressure  and  influence  now  exerted  by 
the  "System,"  in  behalf  of  public  works  contractors  and  the  public  utility  concerns. 

6th.  The  united  interest  and  loyalty  of  the  great  majority  of  the  citizens  in 
the  public  service  of  all  kinds,  rendered  for  the  benefit  of  all. 

Evil  Influences  Still  Remain 

If  all  of  the  influences  now  exerted  by  the  interests  connected  with  public 
utility  service  and  public  works  contracts,  were  removed,  there  is  still  enough 
self-interest  left  from  other  sources  to  more  or  less  effectively  stand  in  the  way 
of  the  best  and  most  efficient  government,  devoted  to  the  general  good.  There 
are  many  forms  of  petty  graft  that  still  remain  as  a  temptation  for  dishonest  and 
unscrupulous  persons  to  seek  and  obtain  office  for  narrow  self-serving  and  "profit." 

Gains  More  Than  Worth  the  Effort  to  Secure  Government  Ownership 

From  the  fact  that  practically  all  American  cities  have  been  and  are  poorly 
governed,  an  earnest  and  determined  effort  should  be  made  to  discover  and  apply 
effective  remedies.  We  believe  from  the  facts  shown  in  this  report,  that  the  first 
step  should  be  to  establish  all  public  utility  service  and  public  works  construction 
as  government  undertakings. 

To  do  this  for  the  entire  country  will  mean  a  great  amount  of  constructive 
effort  and  a  fight  of  no  mean  proportions.  In  our  estimation  it  is  a  fight  that  will 
unquestionably  have  to  be  made  and  the  sooner  it  is  started  in  earnest  the  better 

United  States  Government's  Ownership  of  the  Telegraph;  Other  Service 

The  United  States  Government  constructed  the  first  telegraph  line  in  1843-4, 
from  Washington  to  Baltimore,  and  sold  it  to  private  parties  in  1847.  In  1866 
Congress  passed  a  law  authorizing  the  government  to  purchase  all  or  any  tele- 
graph lines  after  1871.  Many  of  the  Postmaster  Generals  have  since  recommended 
the  purchase  of  the  telegraph  by  the  government. 

We  believe  the  United  States  Government  should,  with  the  least  possible 
delay,  take  over  both  the  telegraph  and  telephone  systems  of  the  country  and 
operate  them  as  a  part  of  the  postal  system.  All  of  the  business  now  carried  on 
by  the  private  express  companies  should  be  carried  on  by  the  post  office  depart- 
ment, and  the  private  concerns  prohibited  from  competition,  as  was  done  in  the 
letter-carrying  service  in  1845.  After  this  is  accomplished  the  general  government 
should  begin  taking  over  the  interstate  railroads. 

[37] 


What    Los   Angeles   Should    Undertake 

For  the  City  of  Los  Angeles  we  recommend  and  urge  that  all  local  utility 
service  be  taken  over  by  the  City,  preferably  in  the  following  order: 

1st.  The  completion  of  the  purchase,  and  the  development  of  the  required 
equipment  for  the  entire  city  electric  service; 

2nd.    Complete  the  purchasing  of  all  of  the  remaining  water  companies; 

3rd.  Take  over,  with  the  least  possible  delay,  the  entire  equipment  of  the 
Los  Angeles  Gas  aiiH  TTiAr-tHr  Pornnratinn  as  well  as  all  other  gas  supplies  in  the 
city; 

4th.  Take  ove    c»i(j  inLal  ..dusj;  u  ..u  ..u.  service; 

5th.  Take  over  all  of  the  terminals  of  the  interstate  railroads  in  the  city; 

6th.  Extend  the  scope  of  the  municipal  markets; 

7th.  Establish  municipal  baths; 

8th.  Establish  municipal  slaughter  houses. 

Any  American  City  that  first  accomplishes  all  of  these  undertakings  may  be 
counted  a  real  pioneer  as  far  as  this  country  is  concerned. 

Better  Government!     Government  Ownership  One  Step;  Better  Citizenship  Another 

The  full  realization  of  government  ownership  and  conduct  of  all  public  service 
will  not  automatically  insure  honest  and  efficient  government.  As  yet  we  have  not 
trained  ourselves  to  that  high  standard  of  citizenship  that  calls  forth  the  unselfish 
interest  and  devotion  to  the  general  welfare,  that  is  essential  to  the  success  of 
self-government. 

We  hear  much  of  the  patriotism  of  war  at  this  time.  The  demand  and  in- 
centive for  the  patriotism  of  peace,  though  not  as  intense  as  that  of  war,  is  never- 
theless ever  present  to  enlist  the  disinterested  efforts  of  all.  We  must  foster  the 
constructive  patriotism  of  peace  for  the  common  good  of  all. 

The  accomplishment  of  anything  really  worth  while  generally  costs  consider- 
able effort. 

To  redeem  our  municipal  governments  from  the  old  curse  of  inefliciency, 
graft  and  misrule  is  more  than  worth  the  effort  It  will  cost.  As  it  is  a  real  Job, 
let  us  go  to  work  with  determination  and  keep  at  it  until  we  succeed. 

Approved  June  7th,  1917,  by  Committee  on  Municipal  Ownership. 

(Signed) 

MARTIN   BEKINS. 

RALPH  BENNETT. 

H.  STANLEY  BENEDICT. 

T.  E.  GIBBON. 

S    C.   GRAHAM. 

JOHN  R.  HAYNES. 

C.  W.  KOINER. 

RAY  E.  NIMMO. 

CHARLES  K.  MOHLER, 

Chairman. 


Ordered  Printed  by  the  Club  June  30,  1917. 


WALTER    R.    STEVENSON. 

Secretary, 


[38] 


RETURN  TO  the  circulation  desk  of  any 

University  of  California  Library 

or  to  the 

NORTHERN  REGIONAL  LIBRARY  FACILITY 
BIdg.  400,  Richmond  Field  Station 
University  of  California 
Richmond,  CA  94804-4698 

ALL  BOOKS  MAY  BE  RECALLED  AFTER  7  DAYS 
2-month  loans  may  be  renewed  by  calling 

(415)642-6753 
1-year  loans  may  be  recharged  by  bringing  books 

to  NRLF 
Renewals  and  recharges  may  be  made  4  days 

prior  to  due  date 

DUE  AS  STAMPED  BELOW 


OCT      9  1991 


